Gold in Freefall: What Would Tom O’Brien Do Now?
Tom O’Brien, editor of The Gold Report newsletter and CEO of Tiger Financial News Network, was on CNBC yesterday talking to Amanda Drury and Brian Sullivan about the dreary performance of gold over the last few days.
O’Brien said gold is a very small market and the SPDR Gold Trust (GLD) is forced to sell its physical gold on the way down, which accelerates the decline. O’Brien added gold wouldn’t bottom until the dollar index gets to 89 (currently at 82).
O’Brien mentioned that hedge fund manager John Paulson owns 21 million shares of GLD which is a problem.
Brian asked O’Brien if gold could rise along with the dollar, to which O’Brien brought up the Cyprus situation in which both rose. O’Brien said we could see that happen again in a couple of years.
O’Brien expects a flushout and mentioned the price of production for the average producer is about $1,100 to $1,150 which could serve as a bottom.
The interview continued with O’Brien further commenting on the importance of “king dollar” to the gold market.