James Turk - Expect a Big September for Gold & Silver
With gold continuing to trade solidly above the $1,800 level, today King World News interviewed James Turk out of Spain. When asked about the action in gold and silver Turk responded, “No matter how you look at it Eric, August was a solid month for gold and silver. Silver was up 4%, while gold climbed a spectacular 12.3%. By any measure that was an awesome performance. I think September is shaping up to be another great month for the precious metals, so don’t be misled by today’s slow start to the month.”
James Turk continues:
“There is a lot of tension bubbling underneath the surface, so be prepared. Both the precious metals and the mining stocks are showing good accumulation. So when traders fund managers and traders get back from their summer holidays next week, I expect the buy orders to start rolling in.
Here is the important point Eric, gold remains undervalued and all of the fundamental factors that have been driving gold higher are still in place. In particular the sovereign debt crisis in Europe is still unfolding, which is worrisome given that the German economy appears to be slowing down. This makes it less likely that German taxpayers are going to continue footing the bill.
On the other side of the Atlantic, US government spending continues unabated, making it increasingly likely that most of this debt is going to end up being monetized by the Federal Reserve, US banks or foreign central banks. This brings me to my next point, inflationary pressures are building across the globe as a direct consequence of all of these governments borrowing money and that is then turned into currency by their central banks.
Given that the zero interest rate policy central banks are pursuing will last as far as the eye can see, why would anyone not hold gold for their liquidity and savings? I think this realization is dawning on more and more people. The dire economic news and remote possibility that politicians are going to reverse and do the right thing is becoming increasingly recognized worldwide. So Eric, we remain on this same path, which as you know from our many discussions will ultimately lead to hyperinflation of the US dollar.
When asked where gold and silver are headed over the coming months Turk responded, “In the near-term all eyes are going to be focused on the September 7th decision by the German constitutional court. That’s the day they are supposed to give their opinion on the legality of the bailouts, which have been masterminded by politicians. Regardless of what the German court decides, everyone should remain focused on the key issue, namely the ECB has been politicized and the euro as a consequence has been debased by all of the poor quality sovereign debt the ECB has been forced to purchase.
In other words Eric, I don’t see anything coming from Germany that would alter gold’s uptrend. Then on September 20-21 we have the next FOMC meeting, which will likely announce more policies that will debase the dollar. These two events taken together should send gold and silver significantly higher as we move towards the end of the year.
So get ready to see gold over $2,000 and silver over $50. If it doesn’t happen in September, which I see as a 50/50 possibility, the odds improve to 80% that it will happen in October. The bottom line is investors should expect a big September for gold and silver, just like the one we had in August.”
