TETT: Do you think that gold is currently a good investment?
GREENSPAN: Yes… Remember what we’re looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can macth it. (source: Zerohedge).
Apparently that was part of an interview that never made it into the transcript published by the Council on Foreign Relations with Greenspan by the Financial Times’ Gillian Tett (LINK).
The precious metals’ sector spiked higher today by a considerable amount after the Government-manipulated employment report missed the markets’ expectations. Gold and silver have been relentlessly pushed lower by the western Central Banks’ repeatedly dumping large quantities of gold and silver paper gold contracts onto the market during the least active trading periods of the trading day (typically overnight between the end of India/China trading and the start of London.
The mining shares have been demolished to the point at which their value collectively in relation to the price of gold is the cheapest in market history. Mining industry godfather, Pierre Lassonde, stated in a interview with King World News that he just put $10 million in mining shares: I just put $10 million into the market today in gold equities. I can’t help myself. From now until early December is the best time to buy shares because people are literally throwing the shares away. By the end of December the market will turn around, and at some time between January and March you will double your money. (LINK)
I’m not close to calling a renewal of a bull market in the sector but the mining shares had a huge day today. Many individual stocks were up over 10%. We know the U.S. Mint is out of silver eagles and has suspended all orders. According to a few coin dealers with whom I chatted with today, the Royal Canadian Mint has apparently temporarily suspended sales of gold and silver bullion coins (I have not been able to directly confirm that).
At some point, the metals/miners are going to re-price at a significantly higher level. Just on pure supply/demand, if nothing else. My new favorite silver miner was up nearly 10% today. It has outperformed the sector during this brutal sell-off period and I expect that it will outperform on the way back up: Mining Stock Reports. This Company now produces cash flow down to about $12/oz (base on all-in costs) and its operations were generating free cash flow late in the 3rd quarter. My report shows probable price targets even it silver were to go sideways at the current price level.