James Turk continues:

The price of gold and silver jumps, but then something rare happens.  Instead of falling back in a correction to consolidate their price gains, which is normal trading action and therefore to be expected, gold and silver just move sideways.  Then, after a few days, they again score another big jump in price, followed by another sideways move.  If you look at their charts for the last few weeks, there have not been any normal pullbacks.

This trading action confirms the point I have been making in our recent interviews....

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“There is a lot of money on the sidelines waiting to enter a market in which physical metal is tight.  When you couple that with the amount of shorts looking to cover, gold and silver are not being given any opportunity to correct in the normal way with a typical pullback. 

Buyers are not giving the precious metals a chance to correct.  Their price just moves sideways, thus thwarting the selling from central planners who do not want to see the precious metals move higher.  A sideways consolidation is one of the strongest patterns you can find in a bull market, so the way gold and silver have been trading bodes well for more big price gains in the weeks and months ahead. 

In fact, Eric, I keep asking myself whether this remarkable display of strength is telling us something important.  Is it a subtle signal that we are at the beginning of an uptrend that will not only lead to new record highs, but is this the beginning of the move that in the next few months will result in the ‘big one,’ when gold and silver buyers totally overrun the central planners?  

Only time will tell of course, but the ‘big one’ will be spectacular.  Gold and silver will just keep climbing in panic buying because people will be rushing out of all types of paper in order to protect their wealth by buying physical gold and physical silver.

I have been expecting this ‘big one’ for some time - and recommending that everyone patiently accumulate physical metal while waiting for it.  It will happen because the reality is that the market is bigger than any government or group of governments acting in concert to manipulate prices with their interventions.

Governments intervene because they don't like the message that the market is giving them.  They think they can create a new reality, but they can't.  Eventually, their interventions just distort the market process and prevent true price discovery that actually reflects prevailing conditions.  So these interventions are always doomed to failure. 

Just look at the dozens of currency collapses since WWII.  Each one is plain evidence that currencies backed by nothing but central planner promises are doomed.  When their collapse occurs, gold and silver do not pull back in a normal correction.  They just keep heading higher.

There are other signs that are pointing out that this may be the ‘big one’ besides the way gold and silver are trading.  Look at the dollar, which has been heading south for several weeks now.  Its chart looks terrible, and suggests the flight from paper is building.  The same conclusion can be reached by looking at US Treasuries.

Even though the Fed has said it will keep long-term interest rates low, T-bond and T-note yields are creeping up.  It is another sign that money is fleeing paper, but here's the important point, Eric, we cannot predict the future, but we all intuitively know a safe-haven when we see one, and that of course means gold and silver.  They are the ultimate safe haven because they do not have counterparty risk.

© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

The interviews with Bill Fleckenstein, Egon von Greyerz, Felix Zulauf, Rob Arnott, Michael Pento, Gerald Celente, James Dines and Marc Faber are available now.  Also, be sure to listen to last week’s line-up of other KWN interviews which included James Turk, Art Cashin, Egon von Greyerz, and Sean Boyd by CLICKING HERE.

Eric King

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© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,

rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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