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James Turk continues:

“This short-term volatility is particularly obvious in silver. The intraday charts the past few days have some large swings, which result from the big shorts pushing the paper market around to see if they can dislodge some longs. This is particularly to see if they can pick up some physical metal from the weak hands.

The paper shorts never go on holiday. They have too much at stake, and they use periods of limited liquidity to hit the market hard to try to shake people out. The shorts are now being forced to retreat, and I have been waiting for another catalyst that will send both precious metals higher, Eric.

Another round of QE by the Fed would do it, but that probably won't happen until June. In the meantime, Europe is starting to unravel again, but the stakes are getting much bigger....

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“The Italian stock market has been hit bad, and Spanish bond yields are rising to the danger levels.

In this environment, I am wondering how much longer it will take for the paper shorts to realize they can't push gold and silver hard enough to break these $1650 and $32 support levels. But there is a more important point to be made here, Eric, than focusing on these short-term swings.

It is times like these when I like to step back and focus on the big picture, and here's where the following silver chart comes in.

We have been speaking about this chart for several months now, and it is still giving us a very bullish picture. Nevertheless, we are still waiting for the correction to end, which has now dragged on for 50 weeks since the reaction in silver began.

There have been 31 down weeks (red marks) and 19 up weeks (blue marks). Yet even with the high preponderance of down weeks, silver is only off about one-third from its peak. That is exceptionally bullish. Corrections can drop the price as much as two-thirds from the previous peak. Silver did make two quick dips below $30, but each time the price snapped back.”

Turk also added: “Governments and the people who have come to rely on them do not realize that the socialism game being played for so many decades is ending. Economies cannot exist when the number of tax-eaters are greater than the number of taxpayers, but that has been the case in Europe for awhile now.

Some 52% of France's GDP, as one example, comes from government spending. That is not sustainable, and with the private sector shrinking pretty much throughout the eurozone, the growing burden being placed on it is making matters even worse.

We know from history that socialism brings about the end of empires. It also destroys a nation’s currency. This is why it is so important for KWN readers around the world to protect themselves with physical gold and silver.”

Eric King

KingWorldNews.com

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Turk: Gold Shorts in Retreat, Currency Destruction Guaranteed

With gold trading at $1,660 and silver attempting to rally back to $32, today King World News interviewed James Turk out of Europe. Turk told King World News that the shorts have not been able to break the gold and silver markets. Turk also said the current trend guarantees destruction of the currencies. Here is what Turk had to say about the situation: “It has been a rough couple of weeks, Eric. That is not unusual over a holiday period, like the 4-day weekend here in Europe. Liquidity usually dries up during these periods, so short-term volatility can often be the result. And we have seen that in both the precious metals, with gold again testing support at $1650. Silver is testing support under $32.”

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April 10, 2012

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