James Turk interviews Hugo Salinas Price on silver and sound money

GoldMoney founder James Turk interviews Hugo Salinas Price, president of the Mexican Civic Association for Silver, about silver's potential to return as money and about sound money generally in a 22-minute video

James Turk: Silver is Approaching Stage Two of its Bull Market

Back in April 2007, I wrote about the three stages that appear in every bull market, and more to the point, that gold was approaching the end of stage one.  Gold back then was still trading around $690, and therefore well below its then record high of $850 reached in January 1980.  My view was that “gold looks ready to make a new all-time high. When that happens, stage two begins. There will not yet be widespread excitement about gold in the next stage, because that won't occur until stage three. But when gold makes a new record high, and particularly after it breaks into a 4-digit price, people will begin paying attention.”

I wrote a follow-up article in November 2009 entitled Welcome to Stage Two of Gold's Bull Market, just two months after gold broke above $1,000.  Focusing on the change in prevailing sentiment, I noted how differently gold was being treated.  "During the first stage of a bull market, the media and most investors alike focus on past issues, rather than future potential.  Over the past decade one consequently heard all the reasons not to own the gold…But there is a notable difference in this stage compared to stage one.  Look how many people are writing and talking about gold.  Gold has moved from apathy and neglect – stage one characteristics – to growing attention.  But importantly, instead of embracing gold and analyzing it to determine relative value, today’s attention is one of widespread disbelief and skepticism that gold can climb higher.  These are exactly the responses one should expect to emanate from stage two."  I concluded by noting that at some unpredictable point in the future, gold will enter stage three "when gold no longer is relatively good value."

I did not make any mention of silver in the above two articles.  It too has three stages, but silver is still mired in stage one, which began in February 1991 after silver had collapsed to $3.50.  It was an astounding 93% decline from its January 1980 peak of $50.  But as we can see on the following chart, $3.50 was silver’s low, and its price has been rising ever since.

This chart shows a massive accumulation pattern, marked by the green lines.  This pattern is a story of strong hands and weak hands, specifically, of silver moving to the former from the latter. 

From its $50 high in January 1980 to its $3.50 low in February 1991, the weak hands were shaken out.  At that point, the accumulation by strong hands – who were buying because the recognized that silver was an exceptional bargain – became the dominant force.  Their buying power was stronger than the selling pressure of the weak hands, and the price of silver responded by starting to climb.  It was classic stage one action, but here’s the important point. 

Silver is still in stage one.  It won’t advance into stage two until $50 is exceeded, just like gold did not enter stage two until its previous high of $850 was hurdled.

I expect that silver will exceed $50 this year, which is a point of view I first mentioned in my outlook for 2010.

Admittedly, I was a little early with my forecast about when gold would enter stage two.  So perhaps I will again be early by forecasting that silver will enter stage two of its bull market this year.  Regardless of the accuracy of my timing, one thing is clear.  Because it is still in stage one, silver remains good value.

James Turk: $400 Silver by 2013 to 2015

GoldMoney founder and GATA consultant James Turk was interviewed today by Eric King of King World News about the continuing increases in margin requirements for gold and silver futures longs. Turk says he expects a sharp snap back in precious metals prices:

Turk commented, “This may explain why Comex is raising margins a second time so quickly, they aim to put more pressure on the buyers. Obviously the Comex is trying to put more pressure on market participants by forcing them to liquidate their longs.”

Turk continues:

“Eric, here we are at $25.50 which is the price that was identified by your London source last week. So they painted the tape, but the Comex open interest shows that they haven’t driven out any buyers which is very surprising. Normally you would expect to see some longs liquidating on any pullback like the one that we have seen over the past few days, but that hasn’t happened this time around.

The buying pressure in the physical market remains, we are starting to see the industrial buyers coming back in to secure supply. My guess Eric is that the industrial users will be there on any price dip like we have had at present. Up to this point we haven’t seen the boomerang effect that I have been anticipating but I am still expecting a sharp snap back in prices.

As we pointed out in the piece which had Mark Lundeen’s illustration in it, gold is dramatically undervalued and this can only result in much, much higher prices over time. I would just add that I expect the gold/silver ratio to decline over time to under 20 to 1, so silver will be exploding along with the price of gold.

As you know Eric I have been projecting gold to hit $8,000 by 2013 to 2015, so that would equate to silver hitting $400, and that is well within the realm of possibility as silver reverts back to its historical mean.”

This is what happens in bull markets, prices climb to levels that previously seemed unimaginable.

James Turk: Silver $30 in Less Than 18 Days

With gold and silver strong today, King World News interviewed James Turk out of London. When asked about silver specifically Turk commented, “I like this flag pattern because when you breakout to the upside you reach your target in half the time it takes the flagpole to form. The flagpole formed over 36 trading days, so the next leg up to $30 will be over in less than 18 trading days.”

Turk continues:

“The other thing Eric is that this time frame is not too far off from the three to four weeks window that I mentioned would take place when silver pierced $21.

We have been saying it is different this time because the ongoing accumulators of physical metal are right underneath the market. This aggressive buying is one of the key reasons why prices are poised to explode.

What I expect to see is a strong close today, and follow through tomorrow. That scenario requires more short covering tomorrow which is likely to happen anyway going into the weekend.

Even though silver is continuing to lead, gold will continue higher as well. Gold will eventually take out the previous high of $1,400. $1,400 is a pit stop on the way to $1,500.”

James Turk sent the above chart to go along with his comments. It shows the flag formation and the corresponding breakout he is discussing in this interview. When silver takes out the previous highs near $25, you should expect to see some serious fireworks to the upside. Gold will be in tow.

James Turk: Is silver ready to move higher?

GoldMoney founder James Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, observes in commentary today that silver has been appreciating just as much as gold has over the last nine years and may be an even better buy now for investors who are prepared to deal with its greater volatility. Turk's commentary is headlined "Is Silver Ready to Move Higher?" and you can find it at the GoldMoney Internet site here:

James Turk: Is silver ready to move higher?

James Turk: A spectacular year for gold and silver

In his new commentary today, GoldMoney founder, Free Gold Money Report editor, and GATA consultant James Turk celebrates the spectacular performance of gold and silver in 2009. 
Turk reports that gold rose in all major currencies except the Australian dollar, and silver beat even that. Turk's commentary is headlined "Gold Shines for the Ninth Consecutive Year" and you can find it at GoldMoney's Internet site HERE

James Turk: Can we trust the silver ETF?

GoldMoney founder James Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, has studied the SEC filings and prospectus of the silver exchange-traded fund on the American Stock Exchange (SLV) and has discovered that they go out of their way to provide for not actually having allocated silver to back the shares sold in the fund. Turk's research revives the long-simmering question of whether the precious metals ETFs are secure investments or just more mechanisms to be used by the financial powers and the central banks behind them to short the metals.

You can find Turk's new report, "Can We Trust the Silver ETF?" at Dollar Collapse HERE