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Precious Metals Dead or Deader?

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QUESTION: Hi Martin,

Thinking in terms of Capital Flows, would it be appropriate to say that gold & silver are falling because the dollar is rising, the Euro is falling and some states need to sell gold to cover their bond exposure?


ANSWER: Yes. The dollar is rising and this will have a positive impact on equities but the precious metals are still moving lower as laid out in the 2014 International Precious Metals Outlook. Equities are in a different position from metals. They are a much deeper market and as such is a place where big money can hide. We even have central banks buying equities and we got word of the Japanese pension fund announcing its shift to equities ahead of the announcement that there would be a sharp monetary easing.