Today James Turk answered the question everyone is focused on in the gold and silver universe and he also warned that central planners are about to have a moment of crisis in the gold and silver markets.
War In The Gold & Silver Markets Heats Up
November 16 (King World News) – James Turk: “When we spoke a few weeks ago, Eric, gold was $1,278 and silver was $17.06. Today gold and silver closed in New York at $1,279 and $17.07. Although their prices haven’t changed much from where they were a few weeks ago, there is a lot going on beneath the surface. We are seeing the market forcing the hand of central planners, rather than the other way around. This is good news for gold and silver…
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Both gold and silver have done a lot of base building, and the breakout from their bases is getting close. Last time we spoke I wasn’t ready to hazard a guess when the breakout would happen because there is no way to predict when a base will end with a breakout. And there still isn’t. But look at the following chart showing the daily spot silver price in London.
Even though both gold and silver are positioned pretty much the same, I want to use this silver chart because its picture is much clearer. Also, even though both metals are trading backwardated in London, the backwardation is much deeper in silver, so it has greater upside potential when the breakout occurs. Meaning, the gold/silver ratio will fall as silver outperforms gold.
The point here, Eric, is that silver looks very close to a breakout and ready to start climbing higher. The chart above also shows the head-and-shoulders pattern that we have previously spoken about (highlighted in green rectangles). The three downtrend lines show how silver keeps getting beaten back in its attempts to break higher, which it is once again trying to do as it moves day-by-day toward the point of the large triangle.
Bullion Banks Desperate To Trigger Sell Stops
Note the red box on the chart. That is what the central planners have been targeting in terms of the artificial manipulation to the downside. It’s their sweet spot. The reason for this is because there are a mountain of sell stops located at that level. So they have been trying to push silver lower for weeks in an attempt to reach that target area in order to create that wave of selling by triggering the sell stops. It’s a game that they have been playing for years.
Triggering those sell stops will give the syndicate of bullion banks, who act as agents for the Fed and other Western central banks, an opportunity to cover many of their short positions in the silver market. Thus, they have been selling loads of paper silver in a desperate attempt to thwart the tidal wave of buying coming into the Comex. And it is a tidal wave.
Also of importance is the fact that the EFPs have ballooned in recent days, particularly for gold. Flat gold and silver prices in the face of soaring Open Interest would be a blatant sign of price manipulation. So the central planners are frantically shifting their shorts to the London OTC market in an attempt to keep Comex open interest from soaring, but all of their selling has been to little avail. Despite numerous attempts to crack silver, they have failed. The same is true for gold.
The central planners even got the mainstream media working for them. For example, a few days ago Bloomberg reported: “Mysterious Gold Trades of 4 Million Ounces Spur Price Plunge.” Obviously the word “plunge” was meant to scare, but hidden in the article was the actual result of this huge sale. To quote the article, there was “a sell-off, sending prices down as much as 1.1 percent.” (Laughter).
A Moment Of Crisis For Central Planners
Given what the central planners have thrown at gold and silver the last six years, a 1.1% ‘plunge’ is not only a welcome relief, it is giving us an important message. The conclusion from this event is that 40,000 Comex contracts trading in a span of 10 minutes did so little damage to the gold price, it is a clear sign that the central planners are up against an immovable force. And we know what that force is — all the national currencies they are printing and debasing from QE and their other schemes is not only going into daVinci’s and other tangible assets, it is also going into gold and silver.
So here is what we face, Eric. Will the central planners dare throw another 40,000 contracts at the market to try reaching their sweet spot and risk having to come up with more physical metal for that portion of the buyers asking for delivery? Or are gold and silver finally going to break out of their respective bases and head higher, ending this period of extreme undervaluation? Only time will tell, of course, but instead of more base building or a drop back to the central planners’ sweet spot, I expect an upside breakout soon, and the tightness in the physical market suggests it may be just days away.” To continue listening to James Turk discuss his prediction for a massive squeeze higher in the gold and silver markets CLICK HERE OR ON THE IMAGE BELOW.
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