Fleeing to GoldInvestors with more than 100,000 Euros, who are...

Fleeing to Gold

Investors with more than 100,000 Euros, who are the ones at greatest risk of losing their deposits in failing European banks, Mr. Sprott said, are not just waiting for the next bank to fail and seize their money. Since the Cyprus crisis, the precious metal markets have seen a significant increase in buying, as shown by US Mint statistics. US mint sales are up 40% in gold and 40% in silver.

I asked Mr. Sprott, with increasing sales, why are prices falling?

He explained that prices are falling because the Comex market, which is a paper market, determines the price. People are shorting the paper market and driving the physical price down. Big banks that were short, he argued, are scaring hedge funds into thinking gold and silver are going to go down. They all start shorting it. All the while the big bankers have been short the whole time and covering their shorts, and now we’ve got all the hedge funds going short.The commitment of traders report showed that the specs increased their short position to a massive 22,382 contracts from about 2,900 as of February 5. I believe that such numbers are a key indication of the way the market is being held down.

Buy the Real

At a time when bonds are paying minimal returns, yet carry significant risk of default, and bank deposits are at grave risk, Mr. Sprott argued and I fully agree, the time to shift equity into real investments, such as gold, silver, platinum and palladium has never been better. China, Russia and Turkey continue to buy gold and silver, he argued, viewing this time as a massive sale on precious metals. For American investors concerned about the future of the economy, it may also be one of the greatest sales in history.

http://etfdailynews.com/2013/04/15/eric-sprott-gold-and-silver-the-greatest-sale-in-history/