Rick Rule: "Gold Has Moved Into Strong Hands"
Rick Rule, Chairman of Sprott U.S. Holdings, expressed confidence in the continued value of gold during an appearance on RT’s new finance program “Boom Bust” last weekend, indicating that when paper gold collapsed last April, the gold trade moved into unleveraged “strong hands” who largely bought physical metals.
“My belief is the collapse in the paper market happened because of leveraged long financial intermediaries, hedge funds, banks… when the momentum was on their side the carry… was very low… when gold and silver rolled over… the margin requirements became very large… the collapse in the paper market happened simply as a consequence of the unwinding of the leveraged long carry trades in precious metals.”
Rule also noted that Asian central banks are picking up the slack in gold markets, although it may be too early to note whether they are weak or strong hands. He also warned viewers to understand the difference between political and technical risk, indicating that some of the worst political risk he has ever experienced was in the U.S.
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