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James Turk - Gold to Rise Over $100 In a Matter of Days

With gold and silver recently hitting new highs, King World News interviewed James Turk out of Spain.  James had this to say about recent developments, ¡°Robert Zoelleck, President of the World Bank, wants to start a debate about a new international monetary system.  The key quote from his article is, ¡®The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.¡±
November 8, 2010
 Turk continues:

¡°This development is significant as officialdom is recognizing what the market has already long recognized, that the present international monetary system has a short shelf life.  This is extremely bullish for gold and bearish for the dollar.  It is not too surprising that the US dollar is going to lose its reserve currency status given the fact that the Federal Reserve¡¯s actions continue to erode the dollar¡¯s purchasing power.

If QE2 doesn¡¯t put the final nail in the dollar¡¯s coffin, QE3 or  QE4 certainly will.¡±

James, it wouldn¡¯t surprise me if we were to see silver move $3 in a single day in the near future which would get us to your $30 target.

¡°I agree Eric, the physical market is so tight anything could happen.  There is a scramble for physical silver and with the rise in Comex open interest, that makes the shorts increasingly vulnerable to a short squeeze.

Gene Arensberg pointed out in the KWN Weekly Metals Wrap this past weekend that the commercials as an overall percentage vs open interest have actually decreased their short position from 37.3% to 35.5% in silver.  The question is, if the commercials are not selling short, who is?  If the commercials were selling short we would be worried because they may be backstopped by the US government.  But these new shorts don¡¯t have that backstop and therefore are vulnerable to a short squeeze as the price rises, and that squeeze could be massive.

This squeeze could be what puts silver over that $30 target that I¡¯ve been talking about.  The gold/silver ratio dropped last week from over 55 to 52.3.  It is now nearing the 50 to 52 level that I spoke of previously.

If we use the 50 level as the gold/silver ratio target, at $30 silver that projects $1,500 gold.  We should see gold move over $100 in a matter of days.¡± 

We are still not seeing sentiment levels at an extreme in either gold or silver, and as Bill Haynes mentioned in the KWN Weekly Metals Wrap this weekend we are still not getting the type of activity on the dealer side that indicates a top.  This is supportive of much higher prices which Turk is predicting.

Eric King

KingWorldNews.com