Your Economy (No Politics)

[basserdan]

Hathaway - Gold Will Now See Massive Mainstream Fund Flows

Eric King
KingWorldNews.com
September 7, 2011

With gold and silver correcting, today King World News interviewed John Hathaway, the prolific manager of the Tocqueville Gold Fund. When asked about the action in gold Hathaway responded, “To me it’s just standard operating procedure for how markets correct. It got a little scary when gold touched $1,900 a couple of times because it was so stretched out and normal market protocol calls for some backing and filling here. I think that’s all it is, just static (noise).”

John Hathaway continues:

“But again, I would hasten to add for both silver and gold, we’re in an environment where the conditions are very favorable for money to come into both metals and you just don’t know what the next news development is going to be that will create the next wave of demand. I don’t trade this stuff, I own it because it’s a great asset to have that’s not in the banking system.

We have negative real interest rates, so people who save money are getting nothing for being in Treasuries. People who bought Swiss francs have been hammered by the Swiss government’s desire to perk up their economy. The European community has been unable to solve the sovereign debt issue and I don’t think they will be able to with the tactics they are using. Consequently, maybe the euro is threatened as a currency.

The above are just a few things I could mention that will make people think about owning gold, owning more gold. Gold is extremely under-owned, most people have missed the whole play, particularly conventional institutions that need to show performance for their clients....

“So ultimately, as you alluded to earlier, the generalist (mainstream fund manager) is going to say, ‘What can I do for my clients, what’s working?’ The bottom line is that gold and gold shares are part of the answer.

I think the gold shares are a huge opportunity for people who are sitting on the sidelines. Basically the markets are down whatever they are year to date and if you were in bank stocks or technology stocks or retail stocks your clients are saying, ‘What have you done for me lately?’ So if you’re the fund manager, you’ve got to be scratching your head and asking, ‘What can I do?’

The gold stocks are an answer and maybe one of the few answers for that portfolio manager. So what we’ve seen over the last seven months is gold rising by something like 30% and during that time the XAU is down about 3% or 4%. The gold stocks represent extraordinary value and extraordinary opportunity right now.”

When asked about silver specifically Hathaway remarked, “That’s the kind of thing, you had sort of a blowoff and now silver is in the middle of a range for the last three or four months. It’s acting well to me and I’m sure it will break out at some point, but it’s quieted down and I would hope that is what gold is going to do.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/7_Hathaway_-_Gold_Will_Now_See_Massive_Mainstream_Fund_Flows.html