Presents several companies in gold
The continuing strength of the U.S. dollar is bad news for the price of gold, and Eric Coffin believes that in the short term a price of $1,200/oz is possible, though there is room now for an oversold bounce. This, of course, is bad news for gold miners and explorers. But in this interview with The Gold Report, the publisher of Hard Rock Analyst counsels that even in a bear market investors are best advised to seek out the potential tenbaggers and presents several companies in gold, base metals and uranium with the potential to flourish even in the bad times.
The Gold Report: You told The Gold Report last year you were "neutral" on the state of the U.S. economy. Since then, the headline unemployment number has improved. Even so, as David Stockman, former director of the Office of Management and Budget, says, there have been no net new jobs created since July 2000, and jobs paying over $50,000 per year have disappeared by 18,000 per month since 2000. What is your view of the health of the U.S. economy?
Eric Coffin: I'm more positive than neutral these days, but I do agree somewhat with Stockman. As unemployment falls toward 6%, we would expect an increase in wage gains. But we're just not seeing that. And five years into the latest expansion, we're not seeing the economic growth spurts that tend to occur coming out of a really bad recession. I don't see how the U.S. economy keeps reproducing the 4% Q2/14 growth if we don't see higher wage gains and higher paying jobs created.
TGR: You've used the term "smack down" with regard to the recent falls in the gold price. What do you mean by this?
EC: It's a wrestling term and means being thrown to the mat. This is what has happened to gold time after time, after every uptrend. The current smack down is due more to strength in the U.S. dollar than anything else. Gold does trade as a currency sometimes and for the past few weeks it has held a strong inverse correlation to the U.S. dollar. I think physical demand will ultimately determine the price level, but ultimately it can be a long time when you're trading.