John Hathaway – Here is Why Gold & Silver Have Bottomed

September 27, 2011

With gold and silver rebounding, today King World News interviewed four decade veteran, John Hathaway, the prolific manager of the Tocqueville Gold Fund. When asked if this latest decline in the metals felt like 2008, Hathaway stated, “It certainly did, the last two weeks especially, it was so panicky. The difference is that the governments in Europe, for sure, and the US, have shown their willingness to step in to provide a backstop (through money printing), in order to prevent a complete meltdown.”

“You can debate whether ‘Operation Twist’ is going to make any difference at all, but it certainly shows an activist Fed stepping in to be as supportive as it can. The precedent has been established that should we have another decline in the markets, the central banks in Europe and the US are going to be on the side of money printing.

Gold was overdone on the upside. Too many people were on board and these kinds of violent, sharp corrections are what’s necessary to get rid of the momentum players in order to establish a base for higher highs.”

When asked if he felt the recent crescendo of selling marked the low, Hathaway responded, “Yeah, definitely it did. I’m simply a market observer (with over 40 years of experience) and a long-term investor, but I saw plenty of signs, panic liquidations and the kind of people that were selling were the kind of people that make bottoms.

I would be on guard for a retest of the lows, but that’s how you go to higher highs….

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