50-Year Veteran Says Despite Pullback, Silver To Outperform Gold By A Factor Of 4 – 5 Times

Despite the pullback in silver, today a 50-year market veteran told King World News silver will outperform gold by a factor of 4 – 5 times.

John Embry: “I’m fascinated by the recent disconnect between the gold price and the HUI gold share index, which has now rallied over 80 percent in the last two months…

Continue reading the John Embry interview below…

John Embry continues: “Gold continues to meet considerable resistance in the paper markets, as the commercial short positions and the open interest on Comex have blown out to recent highs. However, at the same time shares continue to hold up relatively well.

The price action in gold in the period surrounding last week’s FOMC Meeting was ludicrous. After surging to a new high late in the week, prior to the meeting, gold was immediately driven down nearly $60 going into the meeting. When a rate hike did not materialize, gold immediately shot up by some $30, only to meet further stout resistance, which continues as we speak.

Very simply, this is an extremely manipulated market. And when the miscreants lose control, and they will lose control, and the pricing shifts to the increasingly tight physical market, there will be an explosion in the price to the upside. I think the gold shares sense this and continue to trade near their recent highs, despite the increasing interference in the pricing of gold bullion.

Silver To Outperform Gold By A Factor Of 4 – 5 Times
However, I think that the greatest potential lies in the silver market for both the bullion and the shares. Historically, when a robust bull market for gold and silver breaks out, the gold and silver ratio falls precipitously. At this juncture, with that ratio standing at an elevated 78:1, the potential for a huge drop to 20:1 or even 15:1, which has occurred in previous bull markets, exists. This gives silver an upside that may be 4 to 5 times that of gold. Quite frankly, I don’t think an investor can acquire enough physical silver at these bargain prices. But time is running out to accumulate and you can see it on the long-term technical chart of silver.

I’m also intrigued by the continued levitation of the U.S. stock market, despite the fact that it is grossly overvalued, earnings are in difficulty, and the global economy is weakening noticeably. The Plunge Protection Team has its work cut out for it and ultimately I don’t like their chances for success.

Pension Crisis
In conclusion, there was an interesting article in the New York Times about the emerging pension crisis in OECD countries, where underfunded pensions are running into increasing demographic problems. This is because increasing numbers of Baby Boomers are reaching retirement age and their are insufficient workers entering the workforce to support them.

I have believed for a number of years that my generation and the Baby Boomers who followed are going to face a major crisis in their retirement years. I see absolutely no reason to alter that opinion and that article simply reinforced my belief on the subject.”

KWN
March 23, 2016