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Gold and silver are again making the headlines as prices for both metals popped this week in trading. It had already been a good year so far for gold and silver when the Fed announced it will continue a policy of low interest rates into 2014.

January 31, 2012 – Gold and silver are again making the headlines as prices for both metals popped this week in trading. It had already been a good year so far for gold and silver when the Fed announced it will continue a policy of low interest rates into 2014. The ensuing 4.4 percent rise in gold is a very good indication of what the policy means for the precious metals through 2014. Confidence in the precious metals market has now been extended from throughout mid-2013 into all of 2014 and the spot prices of gold and silver are showing it.

However, there is much more happening in the market, even this early in 2012, as Eric Sprott, the Canadian billionaire hedge fund manager outlined in a recent interview. Sprott made headlines in the silver world this autumn as he placed an order for $1.5 billion worth of silver bullion in the October to December timeframe. The quantity alone may have possibly moved the silver market, though Sprott denied this in a recent interview. The news, however, certainly did affect the market, even though Sprott Asset Management did its best to keep the deal quiet and avoid front running.

Now, Sprott is poised to make additional acquisitions in silver and his reasoning for seeing a great bull market is very compelling. The US Mint has been selling Silver Eagles on the same dollar amount they’ve been selling gold. That works out to roughly 5.6 million ounces so far in January, making January 2012 better than ten of the previous twelve months for silver. Because they’re selling as many dollars of silver coins as they are of gold coins at the Mint, it means they’re selling 50 times as much physical silver as gold.

Sprott is clearly very upbeat about precious metals, both as an investment and as a legitimate currency. He cites the imports of gold from Hong Kong into China in an interview with King World News. Up to about five months ago, imports into China were less than 20 tons a month. That number began a rapid curve up until in November China imported 102 tons of gold, which is staggering considering world mines output is less than 200 tons a month. Sprott see this as inevitably affecting the price of gold and silver going forward.

Shannon King

Senior Staff Writer – GoldSilver.org

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