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BookmarkOn the heels of extraordinary turbulence in the gold market, today legendary Pierre Lassonde weighed in on the takedown in the gold market. Lassonde also told King World News what to expect in the gold market going forward. Lassonde is arguably the greatest company builder in the history of the mining sector. He is past President of Newmont Mining, past 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. Below is what Lassonde had to say about the smash in the gold market:
Obviously what we have experienced is the much bigger correction. What we have seen is roughly a 30% correction, or about $600 off the highs. Now, back in the 1970s we had a 50% correction when we had that mid-cycle correction.
This time around I don’t see a 50% correction. I think what we are seeing right now is exhaustion….
“My feeling is that we are going to see a sharp recovery. I suspect that because gold has broken down so fast and so sharp that we are going to get a V-shaped bounce rather than a U-shaped bounce.
So the opportunities that you are seeing now, the gifts that are in the market, I don’t think you are going to see them for very long. This will be very much like what happened in 2008. In 2008 we saw one of my companies, New Gold, go down to $2 a share. Well, it didn’t stay there for more than a week. But those opportunities do come in the market and they are being served up to investors right now on a golden platter.”
Eric King: “Pierre, it sounds like you are expecting a V-shaped recovery in gold just like the one we saw in 2008. That was when gold plunged from over $1000 to the low $700s, and right back up to and eventually through $1,000?”
Lassonde: “Eric, I ask you has anything changed today from a month ago? Has the Fed stopped printing $85 billion a month? Have the Japanese not started printing $120 billion each month? Hasn’t the Bank of England hired a new central banker that’s as keen to print money as Bernanke? Isn’t Europe still in trouble?
So at the end of the day what’s happening is the Japanese are trying to devalue their currency. The Europeans are also trying desperately to devalue their currency. Do you think the US will stand by and let the dollar keep going up? No. The US will keep depreciating its own currency.
What is the US depreciating against at the end of the day? There is only one currency you can’t depreciate, it’s gold. We have seen this type of market volatility in the past. Yes there are very scary moments, and yes for the average investor they can be gut-wrenching, but as I said earlier, for people who have put some cash aside you are looking at opportunities being served to you on a golden platter.”
