Today James Turk spoke with King World News about the key to the gold and silver markets.
June 18 (King World News) – James Turk: The question I am asking myself each day, Eric, is about sentiment. It’s whether the exuberance we saw in the precious metals the second week of May has dissipated. Once it has, the odds are that gold and silver will resume their uptrends.
You will recall the new record highs in gold just a few weeks ago, while silver broke above key resistance at $28. But the market became overstretched, and since then has been consolidating the gains both metals have made this year.
I’m focusing on sentiment for a reason. Other than sentiment, what’s changed?
The fundamental reasons that have been driving gold and silver higher remain bullish. The financial and banking problems remain, not to mention the ongoing potential of some hotheads sparking even greater geopolitical unrest…
This silver explorer recently did a huge transaction with a $4.5 billion market cap producer CLICK HERE OR ON THE IMAGE BELOW TO LEARN MORE.
But the biggest driver for gold and silver also remains unchanged. It is the curse of fiat currency, namely, that governments can create out of thin air through the hocus-pocus of bank accounting the purchasing power that currencies convey.
We individuals don’t get to do that. We have to work to earn the purchasing power we need for our daily needs and wants.
When governments and banks debase the currency, they create inflation and can become over-leveraged. Their debt burden then opens up the potential for a wider financial crisis, like 2008 and all the other crises experienced since the Federal Reserve was created in 1913, which points to the underlying cause.
Banks are inherently bankrupt because of fractional reserve banking, so their problems directly impact the currency deposited in them. It’s a broken monetary system that can only be repaired with gold.
However, don’t expect central banks or governments to go back to gold anytime soon. After all, it’s been 53 years since President Nixon said that the dollar’s link to gold was being suspended only “temporarily”.
So some self-reliance is needed here. It’s the willpower needed to disregard sentiment and continue dollar-cost averaging gold as savings, and silver too if you are so inclined.
This gold chart is interesting, and may be pointing the path forward.
Gold Consolidating Recent Gains For The 2nd Time In A Sideways Pattern (Highlighted RED LINES)
From December 2023 to February 2024, gold traded in a range to consolidate its gains from the October 2023 low. Gold then broke to new record highs, but is now consolidating again.
There’s no way to predict when this consolidation will end, and gold may even head lower. Regardless, gold has been in a bull market since 1913 when $20.67 could be redeemed for one ounce. Gold’s bull market is not ending without some major repairs to today’s broken monetary system, and those are only possible with gold at much higher levels.
Gold is rising because the purchasing power of all fiat currencies is falling from government and central bank debasement of the currency that legal tender law forces everyone to use. But we have a tool. Dollar-cost averaging is one of the best ways to take the necessary long-view when deciding how to buy physical gold and physical silver.
King World News note: Use the weakness in gold and silver, particularly silver, to increase your physical holdings. For those of you who are dollar cost averaging in your purchases, do not try to get cute and time the market. Simply make the purchases at the same time each month or quarter. For those of you who are fed up with the action in the HUI Gold Mining Index, there is a great deal of fear in the sector, which continues to climb a wall of terror. Use weakness to pick up the high-quality mining and exploration stocks.
Just Released!
Alasdair Macleod discusses collapsing Open Interest in the gold market as well as some other wild developments from around the world CLICK HERE OR ON THE IMAGE BELOW TO LISTEN.
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