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Turk:  “Gold finished the first quarter of this year in the same way as the last quarter of 2013, Eric, on a low point.  But there is a big difference between the two comparisons, namely that the gold price rose 7% over the quarter just ended, and did so despite gold being beaten up over the last couple of weeks....


Continue reading the James Turk interview below...




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“It is even more important to note that the low point of the price correction that began in September 2011 was made in June 2013.  The price of gold - and silver too I should add - has not been lower since then.  That’s 9 months ago, and this length of time confirms that both precious metals are forming a huge base. 


Further evidence of this base is the fact that gold has been in frequent backwardation since last year’s June low.  It is an indication that physical metal continues to be accumulated by strong hands that recognize gold’s undervaluation.  More evidence is the ongoing flow of metal from West to East - which by the way shows no sign of abating.


I find it amazing that Western sentiment toward gold and particularly silver remains so negative.  After all, gold’s 7% rise in just one quarter should be viewed as a big event.  But these low sentiment readings suggest that people in the West are simply not paying attention to what the precious metals are doing.  They are also ignoring that people in the East want all the physical metal they can get their hands on.


I should also add, Eric, that the action in gold and silver is being confirmed by the stocks of mining companies.  There was a key non-confirmation in December.  The mining stocks fell below their June 2013 low, but the metals did not.  Non-confirmations like these are often an early advance warning that trends are about to change, and so far this non-confirmation has been true to expectations.  Meaning, the downward trend of the last two years ended late last year. 


This news is important for investors everywhere, yet few people are paying attention, probably because the mainstream media is still painting a bearish picture for the precious metals by reporting the views of analysts from the big bullion banks, nearly all of whom are bearish.  But these analysts are ignoring what central banks are doing to destroy the purchasing power of national currencies. 


The disinformation coming from the mainstream media really makes one shake their head in disbelief.  Everyone following KWN is getting the information that the mainstream media will not share with the public, like the following chart which I presented at the beginning of 2014.  I have updated it to make it current. 




King World News note:  If you look at Turk’s astonishing chart above, it reveals that gold and the S&P 500 have essentially tracked the increase in the Fed’s balance sheet over a period of many years.  This remained the case until Western central planners made the decision to intervene in and manipulate the gold market in a much more aggressive manner.  As the chart above clearly illustrates, what they have done to the price of gold is totally unsustainable, but it is breathtaking to look at the distortion in the very short-run.


Turk continues: “We can clearly see the base that gold has been forming, just as clearly as we can see the intervention by central planners.  It is illustrated by the breakdown in the correlation between the expansion of the Fed’s balance sheet when it announced a $1 trillion QE program in March 2009, and the simultaneous rise in gold and the S&P 500 up to January 2013.


The S&P kept rising because that is what the central planners wanted to see.  They did not want to see a rising gold price that was resulting from their money printing.  So the gold price was suppressed by government intervention, breaking the historical correlation. 


Markets can be distorted by central planners, who think they know better than the countless people in the economy making decisions about their own future.  But those countless individuals will always - and I mean always - eventually overrun the central planners.  We cannot predict how long it will take, but given what gold is doing so far this year, it looks like investors are now gaining the upper hand. 


But there is a more important message in the above chart, Eric:  It shows how much catching up gold has to do. For the correlation to resume, the gold price has to double from here.  So looking ahead, there is every reason to expect that this year’s second quarter will be at least as good as the quarter just ended.  So for the correlation in the above chart to get back to normal, the price of gold needs to rise by more than a staggering 100% over the next 12 months.”


James Turk: Founder & Chairman of GoldMoney

and the author of “The Money Bubble”

To order from Amazon CLICK HERE.



© 2014 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.


IMPORTANT - KWN has many more interviews being released today.


The audio interviews with Ben Davies, Rob Arnott, Dr. Paul Craig Roberts, Andrew Maguire, Art Cashin, Gerald Celente, Egon von Greyerz, Eric Sprott, David Stockman, Bill Fleckenstein, John Mauldin and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.


Eric King

KingWorldNews.com

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