Turk - Why Army of New Buyers Will be Entering Gold & Silver

kingworldnews.com

With many investors worried about the recent action in gold and silver, today King World News interviewed James Turk out of Spain. Turk told King World News that an army of new buyers is going to enter the gold and silver markets. But first, here is what Turk had to say about the situation in Greece: “Greece remains a mess. All the bailout means is that the country has increased its debt by $30 billion euros. The Greeks couldn’t repay what they already owe and there is no way this new debt is going to be repaid either. Greece’s problem, as well as other over-indebted countries, means that we should continue to focus on precious metals.”

James Turk continues:

“Whether or not the CDS payouts on the Greek default lead to a full blown contagion, only time will tell. But one thing is certain, every party that owns a CDS on Greece and other sovereign debts is looking at them closely to determine if they will be paid and how they will be paid.

There is some frustration out there, but we’ve seen this type of action in the metals for twelve years now, Eric. It is just taking place now at higher prices for gold and silver. I expect a few more days of sideways action, but silver should then be headed towards the $35 area....

“I wonder where the silver is coming from to satisfy the demand at these levels. People have to understand there is a big difference between the vast amount of paper trading in these silver markets and the relatively small amount (by comparison) of physical silver trading hands. While last week’s shakeout may have taken out a lot of the paper longs, it didn’t impact the strong hands owning and accumulating physical silver.

What I expect here, Eric, is a resumption of the short-term uptrend by the end of the week. Silver will be testing overhead resistance between $34 and $35. We have been watching the chart of silver (below) develop for several months. You can clearly see the attempted breakout last week and the subsequent move back down to test support.

But the important point is a breakout above $35 is imminent. I still think it can happen this month. Hopefully this will be the breakout that matters. By that I mean the one that will send silver to $68 to $70 within two to three months from the date of the breakout.

The naked shorts in silver, who had the upper hand by sending silver back below $35, are going to be in for a real surprise by the speed and strength of the silver market when it turns.”

When asked about gold specifically, Turk responded, “There was no technical damage on the gold chart either, Eric. What’s happening here is gold is testing support at $1,700, which is continuing inside the trading range that goes back to late January.

The key overhead resistance level for gold is $1,800 and I expect this level to be tested very soon, just like I expect silver to be testing its overhead resistance in the not too distant future.

On this move, you are going to have army of new people entering the gold and silver markets. The primary reason there will be new entrants to the market is right now the chart is telling me a major news event is likely to happen. That news event will propel gold and silver higher, outside of these consolidation patterns, into new record prices.

So the bottom line is there is absolutely no reason to change one’s outlook about the upside potential for both gold and silver. It’s the same story, currency debasement and the unwinding of the debt problem that is causing more and more investors to move into safe havens.

Gold and silver remain undervalued and more importantly, enable owners of the metals to avoid counterparty risk. So as attention moves from Greece to other countries, expect gold and silver to take center stage.”