Silver Formation Projects Spike to $60 - $75 Level

kingworldnews.com

After the explosive upside activity in the gold and silver markets last week, today King World News interviewed James Turk out of Spain to get his take on where the metals are headed from here. When asked about the action in gold and silver, Turk responded, “I like today’s action very much, Eric. Given that gold rose over $100 last week, some correction was expected. The important point, though, is that gold quickly bounced off support at $1,700. I’m encouraged by that action. We may test the $1,700 level one or two times more before heading higher.”

James Turk continues:

“The same thing for silver, Eric. Last week was absolutely spectacular with silver rising more than 13%. So silver, like gold, is taking a little bit of a breather today. What’s really important, Eric, is the weekly silver chart. Silver is forming a beautiful, long-term, flag consolidation pattern. The flagpole started in 2010 at $18 and peaked at $49 earlier this year. We are now in the flag and we can expect a breakout, I think, within the next few weeks.

Here is the good part, Eric, it projects to a $60 silver price, but given the strength of this pattern, one could easily see $75. The shakeout over the past six months has put a lot of people on the sidelines. I don’t expect that money to come back into the market until silver goes back above $43. When silver takes out $43 it should rocket just like it did earlier this year when it nearly doubled in price.”

When asked about fundamentals, Turk replied, “This intervention by the Japanese central bank is a good example of what is wrong with national currencies....

“Central banks everywhere are trying to debase their currencies and Japan is just the latest episode. A few weeks ago it was the Swiss National Bank and we’ve seen continuous debasement by the Federal Reserve with it’s dollar money printing and artificially low interest rates. This is exactly what happened in the Great Depression. Back then they called it ‘Beggar thy neighbor.’

Each country was trying to seek a short-term solution to fundamental ills by manipulating their respective currencies. Manipulation doesn’t solve underlying problems. It doesn’t even offer a band-aid because it disrupts the market process. The net result of this turmoil is hot money, which is constantly looking for a safe home. The underlying chaos detracts from businessmen making sound investment decisions in plant and equipment which creates long-term growth, employment and wealth.

When all countries are aiming to debase their currency, the conclusion is quite obvious. First, you will see money rushing from one currency to another, depending on what central banks are doing at that moment. Second, and more importantly, all currencies are being debased against gold, so its price will rise. The value of gold comes from the market and not from central banks. Central banks can debase currencies, but they cannot debase gold.”