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Turk: “Gold finally plowed through $1250, Eric, and we got the expected move higher.  The central planners tried ‘circling the wagons’ at $1,275, but they could not hold that line -- there was just too much buying power behind gold’s surge....

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As a result, we are now seeing the managed retreat that always occurs when the central planners defensive line is overpowered.  Gold’s enemies - the central planners and their bullion bank cohorts that act as agents for the central planners - need to step back and let gold climb higher.  But the key question is where will they step in again in an attempt to hold the line and thwart gold’s advance?

The logical price level is $1,350, but they may even try to step in here at $1,300.  We are seeing some heavy handed selling at current levels.  Hundred dollar levels are also key points where short-term traders will often take some profit. Also, gold’s important 200-day moving average, which has been declining since April of last year, is presently $1,304.  So bumping up that price level may induce some profit taking at this important technical hurdle.

However, with the 3-day US holiday weekend rapidly approaching, I expect to see more short covering.  The shorts must be frantic by now, given gold’s huge price advance over the past couple of weeks and the collapse of the central planners efforts to hold $1,250.  In fact, this year has been great so far, with gold off to a wonderful start.  It has nearly climbed a spectacular $100 already this year.

Most of the attention is being given to gold, rather than silver, and that is understandable, Eric.  The squeeze in physical metal is mainly happening in gold so far, which as we speak is still in backwardation.  This backwardation is remarkable given gold’s price advance.  It shows that holders of physical gold have not been sufficiently enticed to sell and hold dollars or some other national currency instead.  It is a sign that gold remains firmly in strong hands, and these gold owners see gold’s upside potential.

Even though gold is stealing the show so far this year, do not overlook silver.  It looks ready to catch up.  The gold/silver ratio peaked above 65 at the end of January, and has been gently declining since then.  It is now under 64.  When silver huddles above resistance around $20.25 to $20.40, its upside advance will likely gain some momentum, resulting in silver’s outperformance and an accelerating decline in the gold/silver ratio.

But let’s step back from the trees for a moment and take a look at the forest.  Basically everything is moving in favor of the precious metals.  Commodities are rising pretty much across the board.  Also, China’s credit crisis is deepening.  The government there has bailed out five shadow lenders so far, but there are a lot more problems just beneath the surface.

Europe is facing another crisis as the Italian government looks ready to fall, and Germany’s court basically gave a thumbs down to Mario Draghi’s promise to do “whatever it takes” to save the euro.  Japan’s weak currency is creating huge trade deficits, worsened of late by the rising price of crude oil.  And these are just some of the obvious problems, not to mention that the Federal Reserve is continuing to print unneeded dollars.  The Dollar Index looks ready in the next few days to close at its low for the year.

The bottom line is that 2014 promises to be a great year for everyone who owns physical gold and physical silver.  But let’s take it one month at a time.  Gold rose 3.2% in January, and is doing well so far in February.  A few more months of solid gains, combined with increased momentum as the public once again jumps aboard, and before you know it gold will be at a new record high above $1,925.”

James Turk: Founder & Chairman of GoldMoney

and the author of “The Money Bubble”

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