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James Turk - Developing Banking Crisis Bullish For Gold
With gold and silver consolidating recent gains, King World News interviewed James Turk out of Spain. When asked about the action in both gold and silver Turk stated, “The speed at which the sovereign debt crisis in Europe is accelerating is truly staggering. The insolvent European governments are causing problems for many banks because of all of the government debt that they own. So, what we really have developing here is a banking crisis which is always bullish for gold.”
November 22, 2010
Turk continues:
“What should happen here is that the market should hold support and start to rally at the end of the day. The key support is $27.30 on silver and $1,355 on gold.
You have the cash market constantly trading above futures, so silver is in backwardation which is very bullish. It’s an indication of intense physical demand.
We should be attacking the old highs soon, in a matter of days. I expect the previous highs in both gold and silver to be taken out in short order.”
We have hit your target for the 50 to 52 area on the gold/silver ratio, what is the next target James?
“The next target has to be 40 to 42 which is the level reached after Warren Buffett announced his big silver purchases in 1998. The fact that the ratio has dropped so quickly is an indication that silver is definitley continuing to lead. Look for $30 soon as as a first stop to higher prices.”
Turk continues to note the intense physical demand which has kept that silver market very tight in terms of supplies. This has been a classic bull/bear battle, and in the end the underlying physical market has been and will continue to be the determining factor.
Eric King
KWN BLOG INTERVIEWS
