Legendary Pierre Lassonde: A Spectacular Turn In The Gold Market Is Coming – China And India Will Be The Key
July 22, 2015
With the price of gold and silver tumbling recently, today Pierre Lassonde told King World News that a spectacular turn in the gold is coming and China and India will be the key. Lassonde also spoke about what he is doing with his own money right now. Lassonde is arguably the greatest company builder in the history of the mining sector. He is past president of Newmont Mining, former chairman of the World Gold Council and current chairman of Franco Nevada.
Lassonde is one of the wealthiest, most respected individuals in the gold world, and as always King World News would like to thank him for sharing his wisdom with our global readers during this critical period in these markets.
Pierre Lassonde: “We are in the dog days of summer, but I believe prices are more likely to be higher in September than what we are seeing today. However, if the U.S. dollar is going to stay on a tear, it will be very difficult for the gold market to work its way higher….
“It’s all about the dollar right now. The U.S. is the only economy in the world that’s growing and everybody is fearing the collapse of their currencies, so they are all moving into the dollar. As long as the dollar is ‘king,’ gold is going to struggle.”
It's 1998 – 2001 All Over Again
Eric King: “Will gold mining companies start cutting back on production at this point?”
Lassonde: “They are going to high-grade to survive, so they are going to cut their own throats. That’s what they will do — they will cut their own throats. They are just going to high-grade their mines and then you are going to see mine lives go from 12 years, to 7 years, to 5 years in no time. Essentially the industry is destroying itself. This is exactly what was happening in 1998 – 2001. By 2001, Newmont only had 6 years' life of reserves — that’s it.”
A Spectacular Turn In The Gold Market Is Coming
Eric King: “If you look at the HUI (Gold Bugs Index), the plunge in gold has essentially destroyed the market capitalization of the gold sector.”
Lassonde: “Absolutely. But the flip side of that is that when it turns, it is going to be an absolutely spectacular turn to the upside. The reason for that is because all of the sudden production will have fallen dramatically, demand will be there and nobody will be there to fill it. The more painful the downside, the more glorious the upside.
King World News -- A Remarkable View Of The War In The Silver, Commodity And Gold Stock Markets
China And India Are The Key
You are going to see production cuts and the secondary market (recycling) will essentially dry up. From that perspective I’m optimistic. The key will be China and India. If the Chinese for any reason stop buying, the gold price will be in trouble. China is the key. 60 percent of the world’s gold is sold into China and India.
So the sooner the Chinese economy turns around, the better. Because if China goes into a recession, God help us. India is doing well, which is good. They are probably going to consume more gold this year than last year. And so far the import statistics into China are good. That should keep a floor in the gold market and lead to a recovery.”
