Gold has advanced 10.1% in 2011 and is set to rise for a remarkable 11 consecutive years

The gold price rebounded strongly Friday, gaining $17.50 on the last trading day of the year. At $1,564 per ounce, the price of gold is still lower by $42 this week and has fallen $182 in the month of December. Despite this month’s losses, gold has advanced 10.1% in 2011 and is set to rise for a remarkable 11 consecutive years.

Hathaway discussed his latest thoughts on the gold price in a recent interview with King World News. When asked about the yellow metal’s slide in recent months, he responded that “The action is what you would expect in a thin market like this, the moves are exaggerated. The people that have shorts on, which has been the right trade for the last several months, they are just pushing it to the limit (on the downside) to make their year.”

Given these developments, Hathaway contended that the gold price is near an important nadir. “Traders commitments are indicative of a bottom, sentiment is indicative of a bottom and market action is indicative of a bottom. I’d suspect we will see a couple more scary days in terms of probing the downside, but I don’t think it’s sustainable.”

Heading into 2012, the Tocqueville fund manager stated that “I look for turbulent financial markets that will be contentious on the political front. Probably anemic economic activity and it looks to me like Europe and Japan are heading into recession. You wonder what kind of feedback that will have for the US. All of this will end up with mobs of people screaming for money printing and I think that’s going to be the flash point for gold.”

“Obviously the gold price has to make a stand at some point, but I do think we are seeing panic liquidation,” Hathaway added. “I think we’re at the point where you’re going to see central banks start dumping dollars for gold. The dollar really isn’t strong, it’s just relatively strong to the euro, but ultimately the dollar is caught up in the same mess.”

Hathaway also reiterated his bullish gold price stance on Thursday during CNBC’s Halftime Report. He stated that “I think the conditions that got gold to $1,900 this summer haven’t gone away. It’s just that the metal was overcrowded with too many momentum players, and I think they’ve all been shaken out…You have to take a look at what is it that drives money into gold. Basically, it’s negative interest rates, financial repression, lack of fiscal discipline and money printing.”


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