You can’t accuse Jim Sinclair of mincing his words – nor of not being prepared to go on record with predictions with respect to his analyses of where the gold price is going that other analysts and commentators fear to mouth – whatever they may actually believe.
Sinclair doesn’t care if people think his analyses are seen as far-fetched, or totally over the top. He firmly believes in his personal assessment of what will happen in gold – and you just can’t write off his opinions as deluded ramblings. His experience in the gold market and track record on price predictions makes ignoring what he says unwise.
Even so in a recent interview on King World News in the U.S. in which he predicts that the gold price might move as much as $1,000 up or down in a single day his analysis may seem a little extreme.
In his view it’s a bit like a biblical battle between good and evil – but here it’s down to East vs West in what he sees as a coming gold/currency war as the inevitable forces fighting to bring some kind of order to the global debt situation come up against those desperate to protect the US dollar from sinking into oblivion in a sea of ever escalating debt.
He sees this as causing excessive gold price volatility and while he’s not looking for $1,000 daily swings as the norm, he does feel it could happen two or three times as the battle surges.
But back to the daily $1,000 price moves he points out that back in the bull market, and subsequent price collapse, of the 1970s there were days when the gold price moved 25% up or down – and if this is replicated with a gold price peak level of $4000 then the $1000 move in a day is not out of line with precedent.
Interestingly, though, despite his huge price volatility opinion, his take on where the gold price is headed overall could be viewed as quite conservative in amongst those of the gold price ultra bulls. He talks of $3500 gold or higher perhaps to $4000 or $4400 as where the price is headed, but gives no timescale. This could be seen as modest compared with some of those predicting $10,000 gold.
Sinclair sees price moves of this nature as the inevitable consequence of the global reliance on fiat currencies and escalating debt. At some stage he feels the debt balance will have to be brought under control, particularly in the Western economies and that this will lead effectively to a currency war between the Central Banks of the West and the East with their differing monetary philosophies, particularly with respect to gold.
Sinclair has an extremely strong following amongst the pro-gold investment sector and a good track record in price prediction, although of late his timing has, perhaps, been a little out. He does feel that the recent fall in price has indeed defined a bottom and that gold and silver – and gold stocks in particular – are now heavily underpriced and constitute a terrific buying opportunity looking ahead.
He also feels that the politicians and economists who attempt to control the market perceptions nowadays by talking the economy up may succeed for a time, but that longer term it is not possible to overturn economic law just through perception management and the huge debt positions will have to be returned to balance in some way or another. He thus sees gold as the vehicle for doing this
While all the above does seem to represent an extreme position, Sinclair, and a number of others, strongly believe that the current rising debt scenario through virtually unlimited QE in the US, and perhaps to a slightly lesser extent elsewhere, cannot go on ad infinitum. The economic power, and the gold, is gradually moving from West to East and at some stage he sees an economic war developing between the Central Banks of the two blocs and that gold will be very much in the firing line.
To listen to Jim Sinclair’s views click here to go to the King World News website