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Turk continues:


“Based on Friday’s Comex close, you have gold up $65 today to roughly $1,717.  You often hear about gold being capped, only allowed to move 2% from the previous day’s close.  James McShirley actually discovered this capping technique, which is used by the shorts to defend their position and minimize their losses.  The reason I mention this is that as we speak gold is up 4%, which indicates to me that the shorts are losing control. 


I have been discussing with you, prior to the onset of summer, the fact that I expected this summer to be a repeat of 1982.  The way the market is acting is just confirming my belief that the upside explosion, which I mentioned in my last KWN interview, is now well under way.  This is not a time to be selling, this is a time to be sitting tight with your position.  No one can predict how far or high this will go, but I go back to one of your favorite Jesse Livermore quotes Eric where he says, “Men who can both be right and sit tight are uncommon.  I found it one of the hardest things to learn.”


When asked about silver specifically Turk stated, “Silver has been caught in some cross-currents.  On the one hand, we are seeing a repeat of the pattern where silver falls when a financial crisis heats up.  On the other hand, gold should be a magnet pulling silver higher, and to some extent we have seen that result today.  As an example of how silver bucked the trend of today’s selling pressure, oil was down over $6 on the day, while silver finished up almost 2%.


Don’t get discouraged by silver not doing as well as gold the last couple of trading days, it is building a base for a breakout above $42.  Once that occurs....


Continue reading the James Turk interview below...




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“...silver will in all likelihood shoot straight to $50.”


When asked about the poor performance of the mining shares as of late Turk responded, “One of the key themes at the GATA Conference here in London was how undervalued the gold and silver mining shares are at the present time.  Sometimes you need a lot of patience Eric, but rarely do you ever go wrong when you accumulate undervalued assets and wait patiently for their potential to unfold.  That is exactly where we are in the mining shares at the moment and I remain very bullish about their prospects.”


Tomorrow marks another meeting of the FOMC.  Given the worsening financial crisis over the last week or so and clear evidence that the US economy is heading south, we have to be prepared for the possibility that the Fed will announce QE3 or some variant thereof.  If that turns out to be the case, it will be extremely bullish for the gold price.


If the Fed does not turn on the printing press tomorrow, it could cause the stock market to selloff a little bit further and it could hit gold for a day or two.  But regardless, what we are seeing today is not a repeat of Lehman Brothers where there was a rush for liquidity.  Today the driving force is a rush for safety and any setback in gold, I expect, will be met by safe haven buying as gold’s status becomes increasingly valued in these uncertain times.”


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Eric King

KingWorldNews.com

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