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Turk continues:

“There is also a flag pattern in gold which means that both markets are in sync, and are ready to move higher.  And keep in mind Eric, that we are still below 58 on the gold/silver ratio, meaning that silver is showing good relative strength.  That is a bullish sign for both metals. My target is still 50 to 52 for the gold/silver ratio on this leg up of the bullish move.

I’m still looking for $30 on silver, which means we would have a target of around $1,500 on gold.  One last thing Eric, I think Dan Norcini also made a good point in the KWN  Weekly Metals Wrap this week when he gave the reasons why the mining shares have been underperforming the bullion itself. 

The strategy has worked well for the hedge funds because the input costs had been rising faster than the gold and silver price, thereby squeezing the margins of the mining companies.  But that is now changing Eric, as evidenced by some of the fantastic earnings and free cash flow the mining companies are now generating.

Eric, when I view gold and silver and the mining shares, I view them entirely differently.  The shares are an investment, but bullion is money.  If you want to take some of your hard earned money and invest it in the shares, now is the time to do it.  When I was last interviewed on King World News I said that the bull market in the shares starts now.”

Well there you have it, first we heard from John Embry in the earlier piece on the blog, now James Turk.  The market is acting extremely healthy here, and both Embry and Turk know we are headed significantly higher from current levels during the course of this secular bull market.  And yes, there is a chance the pullback is over.  We’ll keep our eyes on the previous highs in both gold and silver.

Eric King

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