Jim Sinclair: The Weakness in Gold That Isn’t

With gold taken down violently last Wednesday and Friday around December 1st notice, a reader has brought our attention to a piece written by legendary gold trader Jim Sinclair on April 17th, 2010, at a time when gold was trading at $1150, and the gold community was convinced the metal would crash back through $1,000. 

Sinclair urged PM investors to stay the course, and not to let any weakness in gold disturb them, because the entire derivatives market looks like the Wild West and the 40 thieves, and that Greece is not the only sovereign that has used OTC derivatives weapons of mass destruction to cheat, by the time this is over, certain states of the USA are going to get caught in the OTC web.
Rather than crash through $1,000 was many feared gold would do, Sinclair stated that a stratospheric takeoff in the price of gold was at hand.

2.5 years and nearly $800 to the upside in gold later, Sinclair’s message and urging of PM investors to stay the course has not altered nor wavered. 

Sinclair’s April 17th, 2010 commentary is below:

 

The April 2010 gold chart:


From Jim Sinclair:

Dear Friends,

Let no weakness in gold disturb you at this time.

I speak directly to the biggest and the best in the metals markets worldwide. These are not talking heads and in fact are never interviewed. They speak to me because they feel I have something meaningful to contribute.

After 52 (1958 to present) years, it is safe to assume I have learned a thing or two about the noble metal.

France was big at the start of the 1968 to 1980 bull market. The Saudis came in later and were responsible, in my opinion, for taking gold from $400 on the second break through all the way up. The Middle East in general has this time been late to the market.

As the violence only increases in currencies, energy money is baffled on how to maintain the value of this paper developed from crude oil and its products.

Go back to the missive “Gold $5000+ by Martin Armstrong” and revisit his best case scenario which was a decline in April followed by one dickens of a rally thereafter.

Thanks to the Goldman Sachs revelation, the entire derivatives market looks like the Wild West and the 40 thieves.

Greece is not the only sovereign that has used OTC derivatives weapons of mass destruction to cheat.

By the time this is over, certain states of the USA are going to get caught in the OTC web.

No regulation means a damn thing now because regulations are simply from now looking forward. Nothing whatsoever can erase these trillions of dollars of toxic fraudulent BS paper out there.

Even the BIS changed their measure of notional value of OTC derivatives by going to a computer model that is called “Value to Maturity” which reduced the number from one trillion, one hundred and forty four billion of this crap outstanding to a tad over six hundred billion. All that did was create a sad cartoon.

Stay the course. We are a few days from a stratospheric takeoff in the price of gold.

Regards,

Jim