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BookmarkOn the heels of a wild couple of weeks of trading in global markets, today Canadian legend John Ing stalks about a surprise that may send the gold market soaring this week. Ing, who has been in the business for 43 years, also discussed the flight into gold around the world. Below is what Ing had to say in his fascinating interview.
Ing: “Today gold is making a five-month high. Year-to-date gold is up 12 percent and the gold stocks are up almost 30 percent. The next target for gold should be the 65-week moving average at $1,410, but the next major line of resistance is in the $1,550 area..
Right now we are seeing a classic flight to safety. The situation in Ukraine has everyone greatly concerned. The thing that nobody is talking about is that Ukraine has $73 billion in debt and $12 billion comes due this year. A lot of the European banks are holding this debt. So this has to be resolved.
The other factor at work here is that Russia was very much a cornerstone for American policy in the Middle East. Russia was expected to help with Syria and even more with Iran. The common denominator in the Middle East is oil. So we have these geopolitical factors at work here and that’s driving investors into gold.
The other interesting thing here is China’s renminbi slipping after gaining 35 percent since 2008. This is all part of a currency war that has erupted since the United States embarked on tapering. Right now competitive currency devaluations are causing distortions in the currency markets. This is another factor in the flight to safety for gold.
All this is very favorable for gold, but my belief is that we are going to see many more positive influences that are going to send gold higher and the stock market lower.”
Eric King: “John, you’ve been warning about the U.S. dollar, and today the dollar is really beginning to lose its grip on the key psychological level at 80.”
Ing: “Yes. The Dollar Index has been in a trading range from 80 – 81.5. This decisive break of the 80 level is going to send the dollar plunging to the 76 level. No amount of jawboning will stop that. This plunge may well be the surprise that sends the gold market soaring this week. This plunge in the Dollar Index will also be enough to get gold beyond the $1,500 level (over time).
The electricity in the gold market is creating a very favorable environment for capitalization of the the mining shares. We have seen a number of bought deals. This clearly shows there is an appetite for gold stocks. Even though the mining shares are already up 30 percent so far this year, I expect another 20-percent surge in the very near term.
