25 Mar 2011

Silver Backwardation Near All-Time Record

With gold and silver taking off to the upside, today King World News interviewed James Turk out of Switzerland. 


When asked about the gold and silver move Turk stated, “This was great action today by any measure. All we need now is for gold to confirm by breaking above $1,445 which was its previous high. Gold looks like it is ready to run, but worst scenario gold pulls back to test support at $1,420. The odds don’t favor that, but it is possible.”
“I think today was the breakout in gold, but it is one or two days behind silver. The key here Eric is that silver remains in backwardation even though silver is at a new 31 year high in terms of price. That shows that the demand for physical silver is not diminishing even though the price is rising. What’s also important is that the length of time silver has been in backwardation is very close to a new record.”

When asked about the US dollar Turk replied, “After declining from 77 to 75.5 over the last several days, the dollar index had a small bounce today. Action like this is not unusual when taking out previous important low points which the dollar did earlier this week. The next few days or so should be critical because if the dollar index starts rolling over, downside momentum which we have been discussing recently will start accelerating. I would also add, any further drops in the dollar are going to send gold and silver rocketing higher.”

Today probably sent gold and silver bears to the nearest pub, while the bulls were left with the feeling that a big move is at hand.

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