Stunning Interview From Market Legend On Gold, Oil & Stocks

"Eric King:  “Victor, we have seen a brutal 3-year cyclical bear market in gold, similar to to the cyclical bear phase we saw in the 1970s, but this is inside of what is a very long secular bull market.  What about the gold market?”

Sperandeo:  “As far as gold is concerned, we saw a rise in the price of gold for 12 straight years.  I don’t know many markets in the history of mankind that have winning streaks for 12 years in a row in one direction.  Gold has since declined from its high set in September of 2011.

We saw a decline in the price of gold of 28 percent in 2013.  And coming into Friday, gold was down another 2.7 percent this year.  So gold has declined roughly 31 percent in the past two years alone, but this was after 12-years of 15 - 16 percent annual compounded returns.  That’s a hell of a run that gold was on.

So as a big holder of gold myself and a big believer of gold fundamentally, I am not concerned at all.  I’m an investor in gold.  This is a rare thing for a trader but I have been an investor in gold for a long time.  I don’t believe that gold is going to go much lower, and the reason I say that is fundamental.

Right now we are at the breaking point for most gold mining companies.  This is a place where production costs are greater than than the current price.  Even Goldcorp recently reported a loss.  But when mining companies start to lose money, many of them will just choose to shut down production because they will be hemorrhaging cash in order to supply the additional gold to an already robust market in terms of physical demand.  Some will keep producing but they will slow production and let go of workers.  This is why you always get contango markets on low-priced commodities.  This happens because nobody wants to sell when prices are too low.  

Part of the reason we have seen additional weakness in gold is because of the recent dollar strength, but I am still a big bull on gold and fundamentally I believe the price is very near its lows.  So to answer your question, yes, we are still in a secular bull market in gold.  I just don’t see another down year for gold and commodities in general, especially after what the Bank of Japan just did.  Nobody has ever done the kind of Kamikaze money printing scheme the Japanese are doing.  This is just another fundamental pillar for gold in its secular bull market and will be extremely constructive for gold over the long-term.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/11/5_Stunning_Interview_From_Market_Legend_On_Gold,_Oil_%26_Stocks.html