My Blog
Turk continues:
We are at a new multi-decade high, silver is still in backwardation, Comex open interest has been expanding and perhaps most importantly, I refer to the insight Dan Norcini provided in the KWN Weekly Metals Wrap, namely that silver is trading above all of its important moving averages.
The most reliable principle in investing as well as trading is to follow the trend. Commodity traders like to say, “The trend is your friend” and as simple as that statement sounds, it should be investors guiding light for following markets.
The hard part for investors was to buy on that drawdown in price from the old high of $31.23 to just above $26.38. It shows how the accumulation program that we continue to stress can take the emotional aspects out of buying both gold and silver. It just becomes mechanical for investors to buy at the same time each month.
With the new multi-decade high in silver, the shorts find themselves on the ropes. Given my study of short squeezes in the past, we have to open our minds as to what is possible here. There is no way of predicting the future, but short squeezes usually end up with a rapid escalation in price, meaning this could be the big one.
Eric, normally we go into option expiration and both gold and silver will be under pressure. This is the first time we’re going into option expiry with silver in backwardation. That’s why I have been stressing the potential for a short squeeze as we move towards the end of February.
When asked about gold specifically Turk commented, “I think the key point Eric is that gold took out the key resistance at $1,375, so it’s a couple of weeks behind the development we are already seeing in silver. We now have almost four months of solid accumulation here in the $1,300’s which does provide a huge base for much higher prices.
With that kind of base in place we should not only see gold take out its previous highs, but I believe this will provide the launching pad for a very significant move in the price of gold. We have previously talked about a target for gold of $1,800 for this year. The bottom line here is that both of these precious metals have a lot more left in this move.”
So a short squeeze is unfolding in the silver market while gold is preparing to take out its previous highs. Gold and silver continue to punish the bears, much to the delight of hard money advocates around the world.
Eric King
James Turk - Short Squeeze in Silver Could Be the Big One
With silver closing at a new multi-decade high, King World News today interviewed James Turk out of Spain. When asked about silver specifically Turk stated, “I always listen to what the market is telling me. The backwardation and all of the other factors that we have been talking about mean that the market is telling us the situation in silver is very bullish, regardless of what the naysayers are spouting.”
February 17, 2011
KWN BLOG INTERVIEWS
