KWN Cyber Attacked Following Gold Market’s Deep-Throat Interview—The Secrets of the Temple Revealed

King World News is under a vicious ‘distributed denial of service’ cyber attack once again, according to GATA.org.

The attack on Friday of KWN’s servers is the latest of several previous attempts to disrupt Eric King’s broadcast of interviews that expose to the public the extent of the JP Morgan precious metals manipulation scheme—a scheme in full progress, yet still not resolved by the CFTC after two-plus years of the watchdog’s ‘review’ of the evidence. Sign-up for my 100% FREE Alerts

Friday’s attack is believed to have been prompted by proprietary trading data offered up by KWN’s Anonymous London trader regarding a large “Asian buyer” and this buyer’s trading patterns.  It now appears that, according to Anonymous, this large buyer has successfully ‘cracked the code’ of JP Morgan’s equally-large client’s algorithm used to achieve optimum and cost-effective price-suppression tactics in the gold and silver market.  The motive for such a criminal act is obvious to international financiers: capping the gold price lends support to the US dollar.

“Interestingly, the Asian buyers have figured out the algorithms, like breaking an enemy’s code in war, and they are using the algorithmic trading to get the best prices each day for physical gold at these levels,” Anonymous told KWN in the interview that apparently prompted the attack. “The trading is just taking place at lower levels because these bullion banks and the Fed, which manage the price of gold, get overzealous in their price fixing.”

Beginning with the GATA roundtable discussion in March 2010 regarding a vital and material witness to the scheme, Andrew Maguire, and the suspicious mob-like hit-and-run incident that threatened the lives of Maguire and his female companion shortly after Maguire’s shocking announcement of his meeting with the CFTC about the JP Morgan scheme, some person or organized cyber cabal has periodically attacked King’s servers following key interviews with experts providing play-by-play commentary of the ongoing financial crimes committed by the beleaguered Fed and its primary dealer network.

GATA’s decade-long work has demonstrated how the precious metals manipulation scheme works in impressive detail, but prosecution of the case requires a witness to the fact alleged by GATA; that witness is Andrew Maguire.

Two years later, the attacks started again—and the subject of manipulation discussed by one of the world’s leading experts of the gold market, Jim Sinclair of JSMineset.com, as well as Anonymous’ witness to the “Asian buyer’s” entry into the fray, was again the catalyst for the DDoS barrage.

“The attacks started when the London trader interview piece was released April 5,” King told GATA, Friday.  “The attacks continued and intensified when our interview with Jim Sinclair’s futures market analyst, Dan Norcini, was published on April 11.  A very powerful entity did not want this information out there.” Emphasis added.

Due to privacy laws on both sides of the trade, JP Morgan’s large naked short sell-side client can’t be revealed, and the buyer’s identity can’t be disclosed either.  But the overwhelming suspicion by the gold market’s premiere experts as to whom JP Morgan’s big naked short-seller is points to the NY Fed.

Consultant to the Department of Defense Jim Rickards in his interview with TruNews Radio of Apr. 11, explains the grossly unappreciated role gold plays in geopolitics between the US and the biggest Asian buyer of the precious metal, gold: China.  But Rickards stops short at the time of the punch line.

“So Russia, China, Brazil, the other BRICS countries that you mentioned have very large dollar holdings,” Rickards told TruNews’ Rick Wiles.  “So they’re watching their savings account in effect evaporate or melt as we cheapen the dollar, so they’re looking for alternatives.  One of them is gold, but gold is very difficult to find and when you start buying it you tend to drive the price upSo if you want to buy a lot you’re going to be paying higher and higher prices.” Emphasis added.

Precisely.  China needs a counterparty to provide ‘dig up’ the gold—the weak hands.

What Rickards neglects to add in the interview with TruNews is that, for China to offer an alternative to the dollar in a new reserve currency scheme endgame, it will have to match the US’s alleged 8,150 tons and the Europe’s verified 10,000 tons of European gold to earn a seat at the BIS table.  Why else would there be a reason for a meeting in the first place?

Is it any wonder why the Germans refused to back the EFSF with German gold?  It also explains why the US and now, Germany, have no interest in auditing their respective gold holdings.  Military capabilities, oil reserves and gold holdings are secrets necessary for national security.  How much gold does China really have?  No one knows.  All mined gold within China’s borders and procured directly by the PboC are not necessarily accounted for in official disclosures.  The same can be said of Singapore and other ‘money center’ jurisdictions.

Moreover, if China’s “savings” are dominated with and denominated in dollars and euros, what would give China the upper hand in the negotiations to have the renminbi included in a new gold-backed SDR?  A collapsed dollar and euro won’t include trade surpluses anytime soon for China with a heavily weighted trade component to its GDP.  Therefore, it’s fiat currency reserves won’t mean much now that the jig is up for the dollar, and by extension the euro, of which, together represent approximately 88 percent of global paper reserves.

Therefore, Beijing needs to replace as much of its dollar holdings to gold holdings while the dollar remains a viable trading currency.  And Beijing has the patience to play the other side of the Blythe Masters gold giveaway trade.  Beijing has no plans to trash the dollar at this time unless it wants to use it as a weapon in the geopolitics of Iran—which incidentally would like to receive gold for its oil if push comes to shove in its maneuver to counter a SWIFT blockade.  Russia’s military approves of Iran’s decision.

No one is trying to run down Jim Rickards in the street.  And that’s why the Anonymous’ play-by-play of the real war has the NY Fed frantic.  Is it a coincidence that Blythe Masters has suddenly begun to make appearances on financial television to ‘explain’ JP Morgan’s position on the matter of manipulation.  And who else has the clout to impede a CFTC determination of whether the gold and silver market have been, and are, manipulated? Sign-up for my 100% FREE Alerts

Gold Price: Lord Haw-Haw Dennis Gartman announces “Death of a Bull”

Timing gold purchases is quite often very difficult, even for the so-called pros.  So if you think you don’t have what it takes to trade among the best, don’t feel bad, even the ‘pros’ get it wrong.  Sign-up for my 100% FREE Alerts

Taking Virginia-based economist and publisher of the Gartman Letter, Dennis Gartman, for example.  His track record for forecasting gold prices is so bad that he’s become known as the latest contrary indicator—a ‘professional’ punter, if you will.

Moreover, it’s been suggested that the reason for Gartman’s subscription base is to get fast-track knowledge of Gartman’s trade so that a trader can take the other side.

Just last week, Gartman told Bloomberg News, “we are out of gold” as of Monday (Dec. 12) and “the beginnings of a real bear market, and the death of a bull.”

Sounds dreadful, doesn’t it?  So what should gold holders do?  Well, let’s see how the advice of the gold market’s Lord Haw-Haw panned out for investors during previous corrective phases—which, by the way, are those very times when buying gold makes more sense in a secular bull market.

“I feared the whole financial system was coming to a halt, and you need a little gold in that case,” Gartman told Bloomberg News on Nov. 3, 2008.  “I doubt it will anymore. But it sure felt like it a month ago. There’s no value in gold now.”  (See chart, below.)

Three weeks later, on Nov. 25, Gartman didn’t change his mind; he got more bearish when he should have been a raving bull!

“We are short of gold,” he said in a Bloomberg interview. “We shall always sell rallies such as these that retrace as classically as this market has.”

As the market continued to rally, Gartman became ever more aloof, stating on November 16, 2009 that there was, indeed, “a gold bubble” and anyone thinking otherwise is “naive.”

Apparently, ‘Mr. Gold’ James Sinclair of JSMineset hasn’t been a long-term subscriber to the Gartman Letter.  Eight weeks earlier, Sinclair saw gold for what it is: a hedge against currency devaluations.

“The carry trade has dropped the dollar as a currency of choice,” Sinclair told Bloomberg Radio in a Oct. 7, 2009.  “Gold is competition to currencies,” and added that he expects gold to reach $1,650 per ounce by the first quarter of 2011.  Sinclair was off by five months, as gold soared during the summer of 2011, reaching his $1,650 price target in August.

Back to Gartman:

Somewhere between the dates Nov. 16, 2009 and May 18, 2010, Gartman became to think, maybe, it was he who was naïve about the gold market, jumped back into the “bubble” at some point during the six-month period, then proclaimed to Reuters on May, 18, 2010, “We want out and are heading for the sidelines.”

Now Gartman tells us gold is done.  Finished.  The Fed is done bailing out banks on both sides of the Atlantic and a deflationary collapse is coming.

Apparently, others, too, have noticed Gartman’s poor record of calling bull market tops.  Didn’t Marc Faber make reference to these misguided souls in his interview with Financial Sense Newshour?  See BER article, Marc Faber Fears Gold Confiscation.

From zerohedge.com:

“In August 2011, Gartman said that gold was the biggest bubble of our lifetime. Inconsistently, only last week, Gartman said on CNBC that he is ‘long gold’ and has been for ‘six or seven months’,” zerohedge’s ‘Tyler Durden’ wrote.

“Gartman’s short term calls on gold and silver have been wrong more often than not in recent years. He tends to turn bearish after gold has already experienced a correction and is close to bottoming.

“Those wishing to diversify and add gold to their portfolio will use his call as a contrarian signal that we may be getting close to a low in this most recent sell off. Our advice is to ignore gurus, price predictions and noise – up and down – and focus on the real fundamentals driving the gold market.”

The obvious question, therefore, is: Why subscribe to the Gartman Letter while others steeped in the gold market have gotten it right?  One doesn’t have to pay for some good advice.  Just point your browser to King World News and listen to Eric King’s interviews with the gold market’s real McCoys, or read James Sinclair’s JSMineset.com blog.  Sign-up for my 100% FREE Alerts

Gold Market hit by Chinese Bailout PSYOP; $2,000 Gold “in 45 days,” says James Turk

The latest dirty trick to save global markets from nature’s healthy forces of ejecting the garbage came, as they usually do, out of the blue during Monday’s afternoon session in NY from none only than the Financial Times (FT), who reported that unnamed sources told the London financial journal that meetings with Italian officialdom and Chinese “white knights” were scheduled to discuss Italy’s scrumptious debt deal.

Not too surprisingly, equity markets in NY, desperate for any sign of reprieve to the inevitable death of the euro in Europe, suddenly got strong bids, reversing the overnight 3%-4% toilet flush in stocks during the European session, and proving once again the Times’ loyalty to uphold the wilderness of mirrors for yet another day.

According to our friends at zerohedge.com, the outfit that’s kept score of the number of Chinese bailout rumors launched since the beginning of the EU crisis, stated, “ . . . this is at least the 4th time that China has ‘bailed out’ Europe in 2011. We give this latest rumor a 15 minute half life.”

In addition, Zerohedge cited a report from Reuters, a news outlet that had no trouble finding a source who may know a little something or two of Chinese intentions in the Italian bond market, quoted Italian Economy Minister Giulio Tremonti on August 4 about what the Chinese told him. “We don’t understand what Europe is,” Tremonti said.  “The second point is that they say ‘if your central bank doesn’t buy your bonds, why should we buy them?’”  Zerohedgers wonder if Tremonti, too, has plans to spend more time with his family.  There’s no word from the straight shooter of a scheduled trip to NY, either.

This latest, in a four-part PSYOP, called “Operation Beat the Chinese Dead Horse,” perpetrated against the people of freegold comes on the heels of another coordinated attack on the gold market following the extended Labor Day weekend—the day the Swiss National Bank announced it will begin pegging the Swiss franc to the dying euro.  Instead of gold adding to its record high off the day’s London trading, threatening to again take JP Morgan’s shorts to the cleaners, the precious metal sold off sharply into the awaiting hands of the now-value-conscious Chinese.

Where was FT on this obvious anomaly?  Not even anonymous sources at JP Morgan could be reached for comment about this strange reaction in the gold market to a very gold-bullish news story out of Switzerland.

Goldcore, however, had this to say of gold’s mysterious sell off on that day:

“Asian traders spoke of some 4,000 lots of gold being ‘dumped’ on the COMEX and of a ‘large sell order.’ This would suggest that the sellers may not have been profit motivated and official selling may have been involved.”  GATA is right again!

And Reuter’s reported the morning of the NY open, “expectations that other central banks may step in to intervene in the currency market” may have factored into the “restraint” seen in the gold trade in London and NY.

Back to Goldcore’s take on the post-Labor Day sell off: “Given the fact that global currency wars have intensified and will likely escalate in the coming weeks, we should be mindful of peculiar and volatile short term movements that give false signals.”

“Investors and store of wealth buyers should continue to buy the dip,” it said.

And the man who knows all too well of the sanctioned criminal enterprise’s tricks in the gold market, James Turk, of Goldmoney.com, told Eric King of King World News on Monday that he wouldn’t be surprised if gold resumes its march higher in spite of central bank intervention yesterday to reinforce the phony double top on the gold chart.

“Gold is headed over $2,000 and if it doesn’t happen this month, it will probably happen in October,” he said.

Turk, one of a handful of guys who got it right on the prediction for another summer-of-1982-like bull move in the yellow metal, added, “So look at shakeouts like we have had today as yet another great opportunity to get rid of overvalued dollars, euros, pounds, etc., and trade them in for physical gold. . . Unlike debtors of all sorts, whether individuals, companies or governments, gold does not default.  This is one of the main reasons to own physical gold as the world’s financial system unravels around us.”

Gold Market: Anonymous London Trader eyes $1,680

The anonymous London gold trader is back with King World News (KWN) to offer his latest thoughts perched with a bird’s-eye view of the gold market.

Confirming the report from Goldmoney’s James Turk, who said that the gold shorts have been under tremendous pressure to cover above $1,600, the anonymous London trader told KWN he sees a lot of shorts unwinding positions above the $1,680 level.  If the gold price can maintain a move above $1,680 at the close, the short squeeze will be on in earnest, according to the anonymous trader.

“The action is very positive,” the trader told Eric King.  “If there is a pit (Comex) close above $1,680, gold will race to $1,705 because of all of the buy stops above $1,680.  There are a tremendous number of shorts in the gold market and a significant number of them will capitulate and close out their shorts above that level.”

As early as two months ago, Goldmoney’s Turk issued the same warning to traders who are not positioned to ride the gold (and silver) market higher in the event of a short squeeze, which Turk said is very likely.

As today’s market action shows the Dow falling hard to 11,650, while gold advances to $1,678, the Dow-to-gold ratio has dropped below the important 7-1 level within the first 90 minutes of New York trading.  If the trend continues, it could indicate traders have lost faith in a U.S. recovery and the prospects of a profitable “risk-on” trade.

On that point, Marc Faber told CNBC on Tuesday that equities have kicked off a fresh bear market, while Barton Biggs, on the other hand, said that yesterday was the day to beginning buying equities for the next 7%-9% rally higher.

According to the London trader, the Faber thesis for the future trend in stocks will show up in the gold and silver market—if the gold price can be sustained above $1,680, and above $42 for silver.

The London trader continues, “The same guys who are shorting gold have been shorting silver.  And if we get the covering in gold above $1,680, silver should move $2.50 higher on short covering as well, which at that time should be roughly the $45 level.”

Moreover, the trader said the strong buyers, who typically accumulate at the best prices for the two precious metals during the seasonally soft summer period, have not yet bought, waiting instead for the pullback.  But, those buyers may have to chase prices higher, creating even more trouble for the shorts, which then may begin a virtuous cycle of higher prices, similar to the massive precious metals rally during the April run-up.

Adding to the drama in the gold market is tomorrow release of the U.S. jobs report.  Another horrendous report on top of June’s (released on the first Friday of July) nasty surprise could trigger the next wave of short covering, according to the London trader.

“The physical buyers in gold have not been chasing the market at this point,” the trader said.  “They have been waiting for their usual summer gift, and it hasn’t come.  Usually they are filled by now, so we are going to see those guys come in shortly, possibly after non-farm payrolls.  They (the physical buyers) have moved their levels way up now and they are going to start chasing price at some point.”

So far today, gold briefly pierced $1,680 to trade as high as $1,682.15 on the Comex before it was slapped back to $1,675.

“Remember, $1,680 is the key here,” the trader said.

Today’s Silver Price Critical, says James Turk

With silver hanging ruggedly firm above the $40 battlefield, the naked silver short cartel could completely lose control this time, James Turk told King World News  (KWN).  But today is a critical day, as the cartel typically throws everything they’ve got at the paper market before the August options expiration of July 26.

The result of that expected struggle will be telling, he said.

“The fact that we are breaking through $40 [for silver], which has provided overhead resistance for so long, is a clear sign that the shorts are losing control,” Turk told Eric King of KWN.  “The upper hand is shifting to the buyers of physical silver.”

Coincidentally, signs of another break from the correlated moves up and down in the Dow and the precious metals market are evident in the Dow-to-gold ratio, which has been teetering on collapsing below the 7.8 mark this week.  If broken, as it was in the panic month of March 2009, the precious metals could attract buyers of the metals this time around and trigger another short squeeze, especially in the razor-thin silver market.  In 2009, the rush to liquidity took the gold price down.  Today, the problem in the global financial system is solvency—not liquidity.

“My near-term target is still something in the mid $40s, but if gold starts moving higher, as I expect, silver will be testing that $50 level by next month,” said Turk, who has warned of that scenario nearing reality all year.  “That is going to spoil the summer vacations of many of the silver shorts who will be left shocked and in disbelief as they buy hand over fist to limit their losses.”

Several bullion experts have expressed disbelief that the Commitment of Traders report (COT) indicates subdued bullish sentiment in silver under the circumstances in Europe and the U.S.  It appears that possibly the large speculators (specs) have mistaken the summer of 2011 as any other summer of the past 29 years, according to Turk, and may not fully appreciate why this summer could be one for the record books.

“I’m surprised by all of the bearish sentiment, particularly in view of the fact that both metals look ready to rocket higher,” Turk continued in the interview.  “The summer is just getting started and this is already looking more and more like the summer of 1982 when gold was up 50% in three and a half months.”

The continuing crisis in Europe and renewed weakness in the U.S. dollar against the commodities producing nations of Australia and Canada, as well as the record print against the Swiss franc, could indicate the dollar’s morphing status from safe haven to one of just another currency in line for trouble after the euro and sterling.  With the euro under threat of unraveling, the dollar, remarkably, still trades at near 1.44 against the dollar, or only $0.16 off its all-time high before the crisis began.  At this time last year, the dollar traded at near parity, and has lost approximately 25% against the Swiss franc within those 12 months.

Is the Swiss franc’s strength foreshadowing the summer rally in the metals?  Today’s silver price action could give traders a clue as to the possibility of such a rally.  If the price of silver can struggle to trade above $40 amid the expected cartel onslaught, Turk could be spot on with his analysis of a breakout and test of the $50 mark.

“So tomorrow [July 26] is shaping up to be an interesting battle between the option sellers and the physical buyers,” he said.

Peter Schiff sees Buying Opportunity in Silver

Peter Schiff believes the vicious pullback in the silver price has created a buying opportunity for investors seeking an entry point back into the metal.

Speaking with Eric King of King World News, the Europacific Capital CEO said the precious metals will benefit from weak economic data expected to be released this summer, forcing Fed chairman Ben Bernanke to reverse the U.S. central bank’s money printing hiatus and embark again on another “quantitative easing” program.

“I think it’s a buying opportunity,” Schiff said about the white metal.  “I do believe the U.S. economy is slowing down, in fact I think it’s going to slow a lot more than people realize.  But for that reason, I think that quantitative easing will not end over the summer.  In fact, I think the Fed is going to step it up. QE3 could be even bigger than QE2 and that’s very bullish for precious metals and very bearish for the dollar.”

Aside from Schiff’s expectations of a renewed decline in the U.S. economy absent the Fed’s wide open money spigots, Bill Gross of PIMCO asked a more germane and most troubling question back in March, a question that Schiff, too, has posed for many months.

“Who will buy Treasuries when the Fed doesn’t?”

In Bill Gross’ March Outlook piece, Gross posited that question—the piece, by the way, was originally published on the PIMCO Web site (now removed), but a copy can be found at zerohedge.com.

Among other important musings in his 1,800 word letter to investors, Gross runs down the list of significant buyers of U.S. Treasury paper, noting that he expects surplus sovereigns will be “good for their standard $500 billion annually,” but banks and bond funds are cutting back on Treasury paper buying—in case of the former, lending again in place of parking capital in U.S. paper, and in the case of the latter, buying less Treasuries due to slower inflows of investor capital.

Moreover, Gross, who agrees with Schiff about the underlying weakness of the U.S. economy absent the Fed’s herculean money printing, questions the Fed’s ability to maintain artificially low interest rates as the Fed halts its buying spree of bills and notes, which by most accounts represents more than 50%, on average, of all maturities along the curve.

So, “who’s left?” Gross asked in his March letter.

Someone will buy them, and we at PIMCO may even be among them,” stated Gross.  “The question really is at what yield and what are the price repercussions if the adjustments are significant … What I would point out is that Treasury yields are perhaps 150 basis points or 1½% too low when viewed on a historical context and when compared with expected nominal GDP growth of 5%.”

Gross continues along the lines of Schiff’s argument, that is: all components of the Leading Economic Indicator (LEI) have been artificially inflated through money printing, a dangerous phenomenon of false signals once observed decades ago by the Austrian economist Ludwig von Mises.

“Bond yields and stock prices are resting on an artificial foundation of QE II credit that may or may not lead to a successful private market hand-off and stability in currency and financial markets,” Gross concluded.

Therefore, Schiff, who approaches the problem at the Fed in the same way as Bill Gross, believes rates are bottoming and have no where to go but higher, which will eventually give rise to talk at the Fed and on the Street that further QEs are necessary to hold the U.S. economy ship up a little longer to see if it will float on its own.

The argument will be made (already being made by Princeton economist and former Fed vice chairman Alan Blinder): if no Fed intervention, the U.S. economy will flounder into more lower economic growth territory, which will tank tax receipts and balloon an already out-of-control federal budget deficit—therefore necessitating further central bank intervention.

According to Schiff (and Gross), that negative feedback loop should put a strong tailwind to both silver and gold until the Fed refrains from its unprecedented “liquidity” operations—a scenario most unlikely, for now.

Schiff thinks the silver price at the recent $50 high “is not going to hold,”  adding, “We are going to take that [$50 high] out and move a lot higher.”

Silver: One Top Trader’s Viewpoint

Starting afresh this week, following a week of death-spiral plunges and rebound, recovery and retest of the $33 level in the silver price, traders have been seeking guidance from their favorite gurus and chart technicians.

Is this the dip in silver that should be bought aggressively?  Or will silver succumb to the seasonal pattern of weakness into the summer months?  Do silver bulls buy now or wait for an opportunity during the seasonally weak summer months of July and August?

One professional trader known for his level-headed perspective, experience and discernment in several active markets has weighed in recently.

Dan Norcini of Jim Sinclair’s Web site, JSMineset.com, told Eric King of King World News (KWN) the silver price looks has looked attractive to traders at the $33 levels, according to volume statistics in the SLV Exchange Traded Fund (ETF) and the cash market, with the latter rumored to be coming from large Asian buyers.

“Trader Dan,” as he’s called on JSMineset.com, told KWN he’s looking for at least one more successful test of the $33 level accompanied with high volume before he’ll feel comfortable suggesting a bottom for silver is most likely in.

On the initial breathtaking 30%+ drop in the silver price during the first week of May, large volume from ‘strong hands’ came into the market as gold’s kissing cousin fell back to the $33-$34 range last Thursday.

After trading briefly above the $39 handle during Tuesday’s New York session, silver sold off again sharply on Wednesday, and again, on Thursday, dropping to Norcini’s short-term target range low of $33 and $34.  Again, very large volume came in during New York’s trading hours, lifting silver to above $35 in its first successful test of Norcini’s target range.

“Well it looks like Eric, based on what I’m seeing on the chart right now for silver, when it drops down below $34, anytime it gets down below there, it seems to be uncovering some pretty good buying,” Norcini told King.  “It does not stay down there very long.  That’s promising. As long as that continues, silver is in pretty good shape.”

If silver can hold the $33-$34 range, the price may trade within a 10% range for a while before making its next move, according to Norcini, who mentioned he saw a lot of hedge funds, who were playing the narrowing price spread between gold and silver, now unwinding their trades, as well as highly leveraged latecomers who couldn’t make margin increases to satisfy the Chicago Mercantile Exchange’s (CME) five hikes within eight days.

So for now, traders could witness the price of silver bouncing around on high volatility until the market stabilizes and demarcates a floor over time, according to Norcini.

“It [silver] will just range trade, Norcini added.  “That would be a good situation for us, to let it range trade between $33 and $34 on the bottom and run up near $36, $37 on the top, maybe work a little higher, but just work back and forth and consolidate, work the froth out of the market, work the emotion out—what we need to get out of the market and calm it down a little bit.”

Silver to make New Highs within “only several weeks,” says James Turk

In an exclusive interview with King World News, James Turk told KWN’s Eric King that he expects the silver price to breakout to new highs, maybe by the end of the month of May.

Turk, the founder and CEO of Goldmoney, is out again with his latest bold call on the outlook for the price of the white metal.  While traders of precious metals recover from the shock-and-awe of silver’s +30% cliff-dive plunge last week, Turk, instead, takes the roller-coaster ride in stride.

“We’ve been here before,” he said, noting similar dramatic price declines in 2004, 2006 and 2008.

But the two questions traders have today are: How long before silver makes an assault on $50?  And will traders have to wait until after the seasonally slow summer months in precious metals before silver continues its winning ways?

This time, price patterns of 2004, 2006 and 2008 won’t be much of a guide, according to Turk.

“So what is ahead for this current correction? Repeats of 2004 and 2006, or another 2008?” he asked rhetorically.  “My guess is none of the above. It took several months after these three previous corrections before silver climbed above the high price that preceded the correction. This time I expect silver will take only several weeks before exceeding $49.78, the 31-year high reached on April 25th.”

Turk’s understanding of the gold and silver market is deep and studied, taking fundamentals, market conditions and feedback from his network of old hands in the bullion business before taking a stand on the likelihood of next meaningful moves for the precious metals prices.

One conspicuous hint of silver’s more-likely move can be gleaned in the futures market.  According to Turk, the continuing shift of commercial traders covering nearer-term contract sales while simultaneously selling contracts far into the future (contributing to a backwardation condition in the futures chain) indicate that the recent sell-off in silver hasn’t materially killed overall demand.

Just as demand from those weak-handed speculators who couldn’t maintain margin requirements following five CME’s margin increase notices within the past two weeks, strong hands wanting physical metal for delivery have come back in to pick up the buying slack, but at relatively bargain prices, Turk suggested.

“As evidenced by silver’s backwardation, which began in January and continues to this day, the demand for physical silver has really accelerated,” he explained.  “As a result of last week’s price decline, backwardation has roughly doubled in size. This is clearly a signal of strong demand for physical silver, and further evidence of a point I have been making for some time, that the paper silver market is losing its significance as a price discovery mechanism.”

Top Active Silver Stocks

Pan American Silver Corp. (Nasdaq: PAAS)

Silvercorp Metals inc. (NYSE: SVM)

Silver Wheaton Corp. (NYSE: SLW)

Silver waits for Gold to reach $1,800 by June, says James Turk

In his latest observation of the silver price action, author as well as Goldmoney founder and Chairman James Turk said he expects silver to consolidate at present levels as gold plays catch-up to silver’s dramatic rally.

After climbing 27.1% ($47.87) for the month of April, 55.2% ($30.84) since the beginning of 2011, and 156.6% ($18.65) since the close of April 2010, the metal price could most likely consolidate in a “bullish flag” price pattern for a period of time, as it did earlier this year in March, Turk told Eric King of King World News yesterday.  Moreover, he warns of increased price volatility for silver as the bull market for the white metal attracts a wider investor following in the coming months and years.

“I believe if you look at the chart, silver is in the early stages of a bullish flag formation,” said Turk. “The size of this flag pattern is much broader in terms of size than the previous flag, but this should be expected because volatility increases as bull markets continue.  If this pattern holds, silver will continue its consolidation for some time before climbing to higher levels.”

If anyone needs a guide to the potential perils of the most volatile of “commodities” markets—the silver market, the lesser-known of the cadre of “real money” advocates, Turk, has navigated for investors turbulent waters of both precious for many years.

But more recently, Turk’s calls on the direction and timing for the precious metals as told to Eric King during his many appearances on King World News during the past six months have been notable, outpacing less bullion-centric investors Jim Rogers, Marc Faber and Richard Russell who all brilliantly comment upon multiple markets.

On January 20, while silver traders fretted about whether to lock in gains after a 7.8% pullback from an 81.2%, 6-month-run to the $31.21 high, set on January 3, Turk went on the record to suggest the risk he saw at that time was NOT holding silver and that the sell off from the January 3 high was most likely a head fake.

“The last time we spoke Eric, the two key overhead resistance levels I mentioned were $1,400 for gold and $30 for silver,” Turk told Eric King in a January 20, 2011 interview.  “I expect that we will be probing those resistance levels in the near future.  The real question in my mind is whether we can take out these resistance levels on the first attempt, or whether the market needs to trade sideways longer in order to build more of a base.”

“Regardless, the risk here is not being in the market,” added Turk, “because once these resistance levels are taken out, both metals are ready to explode to the upside.”

As history has it, the silver price rose and broke through $30 once again, decisively, on February 14. And as Turk suggested the price of silver did, indeed, explode to the upside as we witnessed from mid-February through to the end of the month of April—when the silver price nearly surpassed $50, a potential return of a near-double from the January 20 low of $27.40.

No one can accurately predict the movements of the most volatile and, arguably, the most “manipulated” market of any “commodity,” but investors may want to follow James Turk for his latest musings.

Today, he expects a side-way, range-bound action in the silver price for a spell until gold catches up to his $1,800 target for gold by the end of June—which, by the way, appeared to many long-term bullion holders at the beginning of January 2011 as an absurdly bullish call.

“You know my longstanding price projections have been $1800 gold and $50 silver by the end of June,” Turk told Eric King yesterday.  “Silver essentially reached my target already, so it would not be surprising for it to move sideways in a large trading range waiting for gold to catch up. But regardless of when those price targets are reached, KWN readers need to focus on the fact that the U.S. dollar remains in a long-term bear market.”

So, as many market participants expect a 2008-like swan dive in all risk-on assets due to the Fed’s telegraphed end of QE2 in June, Turk believes the risk until that time is for a “waterfall” decline, as he puts it, in the U.S. dollar, not in gold.  Gold, he said, could reach $1,800 by the end of the Fed’s controversial QE2 program.