mineweb interview of sinclair .. just done

  1. dub
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    FWIW ....


    >Jim Sinclair remains confident of $400 gold this year

    By: Alec Hogg

    Posted: 2003/01/06 Mon 16:00 | © Mineweb 1997-2003

    MINEWEB: Today was a big day for gold and gold shares, gold shares up by nearly 5%, but the gold price through the $350 an ounce level. This is the first time since 1997 – five years – that the gold price has been at that level. We asked our New York correspondent, Timothy Wood for an appropriate comment he said no, rather speak to America’s Mr Gold, Jim Sinclair, who has been calling the bullion price incredibly accurately. Tim doesn’t give these kind of positive comments that easily, so you must be sure that he’s been monitoring very closely what Jim Sinclair has been up to and how he’s been calling. We go across the water now and welcome Jim. The South African gold shares today, Jim, were up by almost 5%, the gold price itself, bullion, cruised through $350 an ounce. Tim says your timing and calling of the gold price has been impeccable. So the obvious question is, where to from here?

    JIM SINCLAIR: We take it a step at a time. The most important event in gold really isn’t as much the number of $350 as it was when it closed above $330. A lot of it had shown a great deal of resistance over a very significant period of time. We are trading now over here, cash, at $355.00 as we speak. And the next area for gold in all probability, with a close at this level around the world, will be $372.00. And that becomes the major next challenge and also the objective of gold right now. So the basic fundamental reasons as well as for currency reasons, as well as for attention reasons.

    MINEWEB: How do you work your forecast? Do you work on the charts, do you put more store on fundamentals?

    JIM SINCLAIR: Fundamentals always come first. Technicals second. We live in a world today where little squiggles and lines are very important in markets. Basically, it’s a self-fulfilling prophecy, because so many people follow it. But much more important than that, where gold is concerned, is its relation at the present time to the US dollar – not because the world revolves around the US, it doesn’t, but because of the dollar’s standard or dollar reserve standard, which has been sold so heavily to many countries by the IMF and the BIS over the past 10 to 15 years.

    MINEWEB: So is the strength of gold then in direct correlation with the fact that the US dollar is under pressure, and perhaps going to weaken further?

    JIM SINCLAIR: It most certainly is, as well as gold did perform quite well for 22 years when the dollar was so strong and gold was so weak.

    MINEWEB: You said minimum projections of $372 an ounce. I’ve read some of the e-mails that you’ve sent out to your community, talking about making some pretty hefty bets with co-commentators that the gold price will indeed break $400 this year.

    JIM SINCLAIR: I used to have a projection on the euro at 1.23 and on the USDX, which is a trade-weighted measure of the dollar, down into the maximum low of .72, off from a high of 1.22. It would correlate to about $414 on gold by historical relationships, and that’s the basis on which I have in a very friendly way made a wager with our Elliot Wave friends who believe differently.

    MINEWEB: Jim, the goings on in the Middle East – how important are they?

    JIM SINCLAIR: They’re important. But they aren’t the reason why gold is up. There is certainly a very significant premium to gold now, which I would estimate somewhere in the area of 18 to 20 points, based on the problems in the Mid East, but more so to the creation of a new currency block out of the Islamic nations, in the creation of the Arab dinar by the big boys and by the Malaysian dinar, which is coming soon, and in fact is going to be settled in gold. Very few people are looking at that, and I think that’s because there is very little reporting on.

    MINEWEB: Are you suggesting, then, that perhaps a lot of Arab money will be moving out of the United States, and particularly the US dollar, into the Arab dinar?

    JIM SINCLAIR: It actually has been moving out of the United States now, based on litigation which has been brought against the Saudi royal family, out of a successful tobacco attorney in Washington DC – I might say a terribly ill-timed legal action, which has put their assets into question, those that can in fact be seized outside of the Arab area of influence and law.

    MINEWEB: Jim, you made your first fortune in South African gold shares?

    JIM SINCLAIR: I was the largest consumer of South African gold shares outside of South Africa from 1968 through 1975.

    MINEWEB: So presumably you’ve kept your finger on the pulse here. Are any South African gold stocks offering value to you?

    JIM SINCLAIR: Most certainly. The discounts that recently occurred in the South African shares, based I think on an improper concept – I’m talking about the discount itself that was improper – will be eaten up by the price of gold. So clearly the South African gold shares have significant value, and you are seeing that value recognised internationally, because the other gold shares that compete with them have significantly less real economic reality within the shares themselves. And it’s very difficult in the area of gold shares to pick something which in fact does create meaningful earnings. The South Africans were always earners, back in the days when they were in fact almost world utilities, when I was a youngster and gold was trading at $35 an ounce.

    MINEWEB: What we worry about in South Africa is the fact that the rand has strengthened to such a degree that it has offset virtually all of the increase in the dollar price of gold. Yet South African gold shares, which are priced in rand here, have been rising, and in certain quarters are believed to be overpriced.

    JIM SINCLAIR: The certain quarters of the overpriced assumptions are quarters which are analysing the value of the shares against present price, and the past 20 years of less than desirable environment. But basically I call them the ounce counters or bean counters. The difference between rand/dollar is a question of percentage. Then the question is what percentage appreciation can be expected in gold. If the appreciation in gold is just the difference between the rand/dollar, then clearly you are going nowhere. But there is a significant potential that the value of gold may eclipse the difference between rand/dollar, making that consideration too much of an actuarial accounting-type thinking than in fact an understanding of future market potentials.

    MINEWEB: And what about platinum?

    JIM SINCLAIR: Platinum is more industrial than precious, as is silver, but notice how silver has shaken off that. Platinum will probably, as the history was in platinum – I remember $1000. I would suggest that platinum will benefit from this by its relatively precious attraction, as silver has clearly shown yesterday. So I am long platinum at these levels, personally.

    MINEWEB: So a short-term view then, as far as the South African gold shares are concerned?

    JIM SINCLAIR: $372.00. Major test patterning right now at the $355, clear close above $354.50, gives us $372.00. Failure here today takes us back down into the $349.42 range, but then I think will take it out anyway. So I will give you a reputational stake at $372.00.

    MINEWEB : Jim Sinclair, known in America as "Mr Gold".


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