With growing fears about the stability of the financial system, today King World News interviewed legendary Jim Sinclair. When asked about the ongoing crisis, Sinclair stated, “Well, the story this morning is we have it but we’re not going to spend it. We are not going to buy our own bonds, we’re not going to cap the rates, but we have it and we might use it. It’s like that every day. Those guys can’t get their story together for more than fifteen minutes.
The ECB has the availability of funds for some activities in the euro bond market. They will use it, they didn’t get it to look at. Gold was up into the $1,760s, $1,755 (to) $1,760 has been a technical area to be challenged. It was a fortuitous statement by Draghi that, ‘We might not use it,’ after which gold (traded) $1,709. It’s something to watch.”
Jim Sinclair continues:
“But it’s the type of action in their market that bespeaks things to come. Fundamentally we are locked and loaded to go into the $2,000 area. Technically this chop is going to end real soon and we’re going to get direction. And the direction, in my opinion, is not going to be on the downside, but rather on the upside.