With gold and silver taking off to the upside, King World News interviewed James Turk today out of Spain. Turk commented, “What we are seeing right now is the breaking apart of the gold cartel. They are losing control of the market just like they did back in the late 1960’s when gold began trading above $35 in the cash market in London, even though the price was still officially fixed at $35. The market was simply saying, we just don’t believe this $35 price anymore.”Turk continues:
“The same principle applies today. The same group that is trying to hold the price down is being overrun just like they were in the late 1960’s. Normally you would expect the gold market to fade into next week’s options expiry. The fact that we are so strong today is an indication that the shorts are being overwhelmed and I am looking for higher prices as a result.
This could be explosive over the next few days if the shorts have to start buying because of delta-hedging on the calls that they have written. In other words, the more the price of gold rises, the more they have to buy. This can be a vicious cycle that feeds upon itself causing prices to explode. (more)
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