Today James Turk told King World News that the price of silver is about to begin to surge back to the all-time high of $50. He also said the price of gold and the mining stocks will be soaring.
December 14 (King World News) – James Turk: There are a lot of things breaking into new high ground, Eric. It’s not just the Dow Jones Industrials that is at a new record.
I expect that it won’t be long before gold is again making new records. And before too long, silver will once and for all finally hurdle $26 and start its climb to $50.
Once that $50 level is hurdled and silver breaks out of the base it has been forming since its 1980 high, while physical metal is being accumulated, silver will begin its bull market. I expect that one will be spectacular, like its bull market in the late 1970s.
Here’s how I see things at the moment. They are illustrated in this chart of the HUI gold share index.
HUI Gold Mining Stock Index Reverse Head & Shoulders Pattern
There have been a number of head-and-shoulders reversal patterns in various markets, all of them signalling that a base was being formed. They’ve been anticipating that the Fed will ease.
This reverse head & shoulders in the HUI Index was completed on November 27 when the HUI closed above the neckline at 230. It then followed through to the upside in a big way the next day, probably as shorts scrambled to cover their positions. No doubt some new money also came into the market.
After peaking at 245, the HUI then declined for 7 consecutive days. Selling pressure like that is rare. Perhaps the shorts were emboldened by seeing gold under $2000.
But both gold and the mining shares comprising the HUI index were simply testing underlying support after their respective breakouts. And not only did support hold, both precious metals and the HUI index rocketed higher after the Fed made it clear that interest rates are not increasing further.
So the Dollar Index dropped like a stone and is again hovering over 102, which is the critical level I’ve been waiting for over a year for it to break. Gold and silver soared, as did the Dow Jones Industrials. It’s all in recognition of a reality that is slowly emerging.
The US government is tapped out. It’s already over-indebted, spending too much money that requires Federal Reserve printing, causing the dollar to be abandoned around the world, except perhaps Argentina where the hyper-inflating peso made the dollar look good.
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