Hathaway - We Are About To See $100+ Up Days In Gold

July 29, 2012

Today four-decade veteran John Hathaway shocked King World News by predicting that we are about to start seeing $100+ up-days in gold. The prolific manager of the Tocqueville Gold Fund also stated that the Fed is close to acting and they are most likely going to do something, “... on a very big scale.” He warned, “... there is nothing worse than having an activist Fed which is ineffectual. That would just destroy confidence.”

Here is what Hathaway had to say: “Hilsenranth, who everybody knows by now is basically a mouthpiece for the Fed, he went quite extensively into what the Fed is thinking about doing, including a round of quantitative easing, putting nominal interest rates to negative levels, and possibly cutting the interest rate on free reserves.”

John Hathaway continues:

(That last move) would force more of that slack money into the economic system. So generally a green light for more easing, which was well received by the bullion market. We still have to go through the meeting next week. We have to see what the FOMC actually decides to do, but it certainly did raise the expectation that there would be another cycle of easing.

The other thing which I forgot to mention in the first comment, is the Fed is thinking about raising the inflation target.... but it’s basically pedal to the metal as far as monetary easing and currency debasement.

We (also) have Mario Draghi saying that he will do anything to save the euro. You are getting a concerted cycle of monetary easing on both sides of the Atlantic. That’s certainly positive for bullion, and ultimately for mining stocks.”

When asked if central planners are preparing people for more printing, Hathaway responded, “Yes, they definitely are. There was a pretty good article in the FT the other day where the writer said the worst thing would be for the Fed to go half way, and do these things in a luke warm way, because there is nothing worse than having an activist Fed which is ineffectual. That would just destroy confidence.

The implication here is that if they are going to do something it has to be on a very big scale. The economic numbers have been very lackluster, so there is not much to cheer about. I suppose the Fed is starting to feel some real pressure to act on their dual mandate, (one of) which is to get the economy going.

My view is that the gold market has been receiving this fairly cautiously because they (players in the market) have been burned so many times. I know it’s great to see gold up $30 or $40 in the last couple of days, but once the Fed casts the die and it’s clear which way they are going, I think we should see triple digit ($100+ up-move) kinds of days.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/29_Hathaway_-_We_Are_About_To_See_$100+_Up_Days_In_Gold.html

Dan