Market Just Beginning
Research for Online Investors
by Sascha Opel
the former chief editor of the first newsletter about the
German "Neuer Markt" (New Market) gives us his current thoughts on the precious metals market. Interview with The
Saturday, February 28, 2009
VANCOUVER, BC, CANADA -
The Gold Report: Sascha, we last
interviewed you in May 2008. At that time you felt that we were beginning a period of re-establishing gold as
currency. Would you review your thinking on this viewpoint for our readers?
Sascha Opel: In our last interview, I
said, "Long-lasting gold bull markets take place when gold's role as money is being re-established. In my
opinion, we are just beginning this period of re-establishment. Those calling for the end of the precious
metals bull market any time soon are sadly mistaken." Today, although nine months have passed, we are still in the
beginning of that period. Look at the gold price in all currencies around the world - not only in U.S.
dollars. Look at the price in Euro, Canadian dollars, South African rand, Australian dollars, British
pound, Norwegian krone, Russian rubles, Swiss francs etc. Gold is now starting to establish new all-time
highs in all those currencies. The masses will slowly realize that no paper currency is safe in the near
world has gone thru a major deleveraging and financial turmoil since our last conversation. How have recent
developments changed your view on gold as a currency or as an investment?
SO: I have not changed my view. It is
still the place to be as an investor.
TGR: Do investors view gold differently in
Europe than North America?
SO: I can only speak for retail
investors in the German-speaking countries like Austria, Germany or Switzerland, where we have most of our
clients. It was a year or 18 months ago when the first few people from the Street started talking about gold.
The last precious metal show for private investors in November in Munich was very interesting: At the booth for
Germany's biggest gold- and silver-coin dealer, there were five lines of people buying physical gold. I saw
thousands of Euros being "changed" into real money-gold and silver.
TGR: If you see gold as a currency, what
advantage has gold versus other currencies?
SO: For me, what's most important is
that gold has no risk of failure, like corporate- or government loans/bonds. These have to pay interest;
someone takes the risk to lend them the money. If you own gold you are completely independent from any
government or any other institution in the world. You don't owe anyone anything. Because of this advantage you
get no interest. But the aim of the international banking cartel and politics in general is to make you
dependent. That is probably the main reason why the establishment fights against gold. In their opinion,
everybody should put his money into corporate- or government bonds. Otherwise they denigrate you as
"anti-American" or "anti-European."
TGR: You believed gold would remain around
$800 for the short term. Some newsletter writers are calling for gold to rise above $1,500 by year-end. What is
your view on the price of gold for 2009, both short term (the next quarter) and long term (through the end of
SO: In May 2008, when gold was around
US$900, I thought it would go down to US$800 for several reasons I mentioned at that time. We went down to
US$720 until autumn 2008. Now we are back at US$900 and will perhaps go up to US$1,000 or US$1,050 at the end
of March. So I was very lucky with my prediction. But - as I told you in the answer to your first question - it
is very important that gold started to climb in nearly all currencies around the world. In U.S. dollars we will
make new highs this year, perhaps by the end of 2009.
TGR: What factors should investors look for
as a signal for gold to "take off?" What factors should investors be looking for that gold has peaked? Should
we expect gold to peak in 2009?
SO: I am absolutely convinced that we
will not peak in 2009! I believe that the price of gold is manipulated. I believe that we will go over US$1,200
by the end of 2009, but I am not sure if we can defend that level. The establishment surely will do something
so that the price will not go too high in too short a time. In looking back at the rise of gold from $35 to
$850 during the ‘70s, the former Fed Chairman Paul Volcker said, "It was probably a mistake to allow gold to
rise so high." And Volcker now is on the Obama-Team! We will not have a peak like 1980, but gold will rise
constantly. Buying on dips like in autumn 2008 is the best strategy, in my opinion. Perhaps sometime later (in
a few years, but not ‘09) gold will start to move US$50 or US$100 for some days in a row to US$2,500 or more.
Then I would sell or hedge some "virtual" gold over the markets (futures, ETFs, short-certificates etc.), but I
would not sell the physical stuff!
TGR: In our last discussion, you suggested
investors own physical gold, making it at least 5% of their portfolio. Do you still feel it is important to own
physical gold given the premiums required to acquire it at this time? Wouldn't owning a gold EFT do the same
SO: I do not trust all these ETFs and
other constructions - even if they tell the investors that the gold is held in this or that, or saved in a
bank. If you want to speculate for a few months, then ETFs are fine, but not for me. I own gold for other
reasons than speculation.
Sascha Opel, former chief editor of the first newsletter
about the German "Neuer Markt" (New Market), Sascha Opel brings a distinctive outlook to the precious metals
market. He was also the co-chief editor of "Der Aktionaer" (The Shareholder), one of the biggest German
Stockmarket Magazines and advisor to an investment fund that achieved an outstanding return of 700% in three
years. Today his company, Orsus Consult GmbH, publishes one of the most popular German newsletters on
commodities and junior mining and exploration.
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