James Turk continues:

“Hitting a wall like that caused a reversal, but support quickly showed up in the $1750s and around $34.  The same thing happened twice last week, but the week ended for the precious metals in a stand-off.  Then today the battle started again when the shorts started pounding gold and silver here in Europe. 

But just like last week, the buyers of physical metal showed up when gold dropped into the $1750s....

Continue reading the James Turk interview below...  


To hear the man with over 40 years of experience in the resource

markets and how he is positioning his clients to weather

the current financial storm click on the logo:

“That price level, which was the low from last week, helped bring in a round of buying by the accumulators of physical metal that took both precious metals back toward the middle of their trading range.

Silver dropped below last week's support, but that was not a surprise given the determined selling we saw.  The shorts were obviously driving the price lower to trigger some sell-stops to cover their short positions.  It was the opposite of what happened last week when the longs drove silver over $35 looking for buy-stops. 

This kind of volatility in silver is not unusual.  Remember this Friday not only ends the week and the month, but also the calendar quarter, when the performance of a lot of traders and fund managers gets reported.  So both longs and shorts often battle it out in an attempt to make their quarter-end position look good.  So we may have more volatility over the rest of the week.

The bottom line is that despite the volatility, nothing has really changed.  The gold and silver charts look really good, and the fundamental factors driving them higher remain bullish.  The interrelated bank solvency and sovereign debt crises have not been solved.  Central banks haven't stopped their money printing. 

Economic activity in most of the world continues to slide.  None of these factors offer a pretty picture, which explains why the precious metals are in an uptrend and in my view are going to climb much higher as we head toward the end of the year. 

Throughout this uptrend in precious metals that began over a decade ago, we’ve seen a lot of battles like this, Eric.  The important point though is that the uptrend shows the physical buyers of gold and silver gaining the upper hand, while the shorts and central planners are losing this war.”

Turk had this to say regarding the mining shares:  “I very much like what the XAU and HUI are doing, Eric.  First of all, they confirmed this breakout in gold and silver by taking out their key resistance points a couple of weeks ago and then continued trending higher.

Last week you could sense that the mining shares were finally starting to do better than the precious metals themselves.  This relative strength has been subtle so far, but my expectation is that the mining shares will continue to show more strength than the precious metals.

Fund managers will likely do more buying of the mining shares as we work toward the end of the week in order to report them at their quarter-end.  That buying could also explain why the mining shares were showing good relative strength last week. 

None of these guys want to go into the quarter-end showing too much cash and too few mining shares, particularly given the stand-out performance of the mining shares over the last couple of months.”

© 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.

KWN has now released the extraordinary audio interview with MEP Nigel Farage.

The interviews with Rick Rule, Nigel Farage, Ben Davies, Dr. Keith Barron, Jean-Marie Eveillard, Bill Fleckenstein, and Egon von Greyerz are available now.  Also, be sure to listen to last week’s line-up of other KWN interviews which included and Felix Zulauf, Rob Arnott, Michael Pento, and Gerald Celente, by CLICKING HERE.

Eric King

To return to BLOG click here.

© 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.

Subscribe to RSS
KWN Blog