Although gold's still well off its December 2009 highs, the price has strengthened in recent weeks; on Thursday, it hit $1,118.40/oz. Not half bad for a metal whose bubble has supposedly popped. But gold still has much further to go, says Andrew Schectman, co-founder of precious metals dealer Miles Franklin.

Schectman and his father founded Miles Franklin in 1990, which has since grown into a highly respected precious metals firm offering everything from bullion to numismatics. Schectman also publishes a weekly newsletter, and travels around the U.S. speaking about the role of precious metals in one's portfolio and the trouble with paper currencies.

Recently, HAI Associate Editor Lara Crigger spoke with Schectman about the current gold market, including an impending metals shortage, the role manipulation plays in the market and why the best days are still ahead for gold investors.

Lara Crigger, associate editor, HardAsetsInvestor.com (Crigger): In one of Miles Franklin's recent newsletters, you described gold and silver as "stealth" bull markets. With all the attention this sector has garnered lately, is this still true?

Andrew Schectman, co-founder, Miles Franklin (Schectman): Well, most people in the country, they still don't have a clue. We're so up to the moment with information, via the Internet, e-mail, BlackBerries, CNBC on every street corner—everywhere you turn, there's more information. Yet most people don't have a clue that gold has outperformed every major asset class for a decade straight. In 2002, gold was $250 an ounce, and silver was $4.25/oz. So you're looking at a gain somewhere in the neighborhood of 500 percent.

When you think about how rapidly information disseminates to the public, it's absolutely embarrassing that the financial advisers of the world—and the people who work so hard to obtain their money—don't realize that, indeed, this has been a bull market that has trumped all others for the past decade.

Crigger: What's the biggest change you've noticed in the bullion industry over the past few years?

Schectman: The one thing that's very different is that there's a complete and total absence of a secondary market. What I mean by that is that all you can buy nowadays is brand-new product. The only people who are selling anything are the people who are selling grandma's candlesticks and bracelets to Cash 4 Gold to make ends meet.

But look and see what's going on in this industry—like mints shutting down, as they've been doing for the past 2 1/2 years. For example, take silver eagles out of the U.S. Mint. There's nothing to be had. We work with one of the largest mint distributors in the world, and when we tried to place an order earlier today [Feb. 18, 2010] for silver eagles, they wouldn't even take it. The U.S. Mint is completely and totally out of silver eagles right now, and they're running things on a rationing basis.

Crigger: So do you foresee a supply shortage in the near future?

Schectman: A major supply shortage. I think that's the key to this industry. In 2008, the U.S. Mint shut down several times. The Canadian Mint was running 12-16 weeks back-ordered. The Austrian Mint was working 24 hours a day, three 8-hour shifts just to meet demand, and they were also 12-16 weeks back-ordered. It was not uncommon back in 2008 for me to say to a client, "Listen, I'll lock in your order, but you're not going to get any product for at least two, maybe three months."

The availability of product to me is the key to understanding the importance of buying gold and silver now, irrespective of what the price is doing, because since October 2007, the U.S. Mint has been the model of inefficiency. Show me another business that turns away immeasurable amount of sales, based on the fact that it's too difficult to get the product. They really have created a situation where everything else is becoming more and more expensive.

I think by the time people realize what's going on, it's my opinion that it will not be a hugely escalated price that will be the hindrance to them getting into the market, although that might attract their attention. But the main hindrance will be the lack of availability of refined product.

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