Last years call by Goldmoney’s James Turk for gold to reach record highs during the seasonally slow summer months seemed, frankly, off the wall. But, not only was he nearly alone in the call (James Sinclair agreed with Turk), he was right. See BER article, On Gold: Team Sinclair-Turk 1, Marc Faber 0.
Now the gold and silver expert extraordinaire expects the silver price to double as soon as it breaks out of its ‘descending wedge’ price pattern. He offers the chart, below, obtained on the KingWorldNews.com Web site. Sign-up for my 100% FREE Alerts
“This following weekly silver chart is really looking very powerful and as I have been saying, once silver hurdles above $35, I expect to see $68-$70 in 2-to-3 months,” Turk told King World News during the weekend.
Compare Turk’s latest call for a double in “2-to-3 months” with silver’s monstrous run of 177 percent from September 2010 through April 2011. That eight-month move, or a 13.6 monthly compounded rate of return, is half the rate of return expected from Turk’s latest forecast of a 26 percent compound rate of return for throughout the three months. A truly remarkable call.
However, before silver bugs can sit back and watch the fireworks, silver must overcome its descending wedge upper band, first, which, from the graph, looks like the $35 level.
“Note how the downtrend line, the $35 resistance level and the current silver price are getting ready to meet,” Turk added. “Silver’s first attempt to hurdle $35 could happen within the next 2-to-3 weeks….”
Today, as silver trades near $33, it could break through $35 by as early as February, according to Turk.
Presumably, dollar weakness must play a part in Turk’s latest call. The chart of the USDX, below, shows the dollar beginning to breakdown from its eight-month rally beginning in early spring, as the euro crisis escalated to a point of near hysteria.
Many bullion analysts have pointed out, however, that throughout the crisis in Europe, one would think the dollar would have manage a more meaningful rally. An 11 percent move off its near-term bottom of 73 on the USDX, the dollar topped out at approximately 81, which, considering the intense focus brought onto the euro, day after day for eight months, the dollar’s touted ‘safe haven’ status should be considered only that: touted.
What could Turk be sure about that would warrant a frenzied buying silver fest?
A move in silver that rapid could possibly mean that a surprise deal in Europe to stabilize the euro is in the offing, or, maybe, Iran gets drawn into a kickoff to WWIII. Or, how about the Fed panics and announces what it has been doing all along anyway, monetization of debt through more QE.
In any event, Turk expects a flight out of the dollar. That would leave Beijing plenty of room to ease again as China fights its own real estate crash and declining exports (see BER article, GET OUT of STOCKS).
What ever triggers a Turk scenario will no doubt disturb the peace in the currency markets, between warring nations, or both.
If silver does double in price within three months following a clean break from the $35 level, Goldmoney’s James Turk should go straight to the head of the class as far as silver investors are concerned. Sign-up for my 100% FREE Alerts