Turk continues:

“The fact that we are starting to see the metals go higher before the end of the year just goes to show that the shorts are losing control. The year end window-dressing is the most important, and they can’t keep the prices down to minimize the losses they are already carrying on their books. So it looks to me like we are getting ready to blast off on the upside.

There are really two factors that are driving the precious metals markets higher:

First, quantitative easing is having its expected effect. QE is debasing the purchasing power of the dollar, and that is causing gold and metals prices to rise. The second factor is the ongoing demand for physical metals in preference to any paper substitutes. I think what is likely to unfold in the first half of 2011 is another Lehman type of event, but the net effect will be somewhat different. Instead of a rush for liquidity, the primary objective will be a rush to safety and that means avoiding counter-party risk. The best way to do that is to own physical metal.

I think the key point Eric is that the serial bailouts of banks and governments that we have been seeing for the past couple of years is going to come to a head in the first half of 2011. To me that means serious financial repercussions, and King World News readers and listeners should be focusing on safety. Therefore we need gold and silver now more than ever.

Whether gold breaks out this week or next is irrelevant, it will happen soon enough. Silver has already achieved the $30 target I had predicted on your network. The $1,500 target I set on gold should be achieved in short order.”

Turk has been calling these markets with remarkable precision. This breakout was inevitable, the fact that it is taking place before the end of the year just illustrates the strength of both the gold and silver markets. Remember, bull markets always surprise on the upside. The fact that end of the year strength has taken some market participants by surprise, this is just textbook action inside of a secular bull market. Enjoy the ride.

The entire in-depth King World News audio interview with James Turk will be released shortly.

Eric King

onclick="window.open(this.href); return false;">To return to BLOG click here.

James Turk - Gold & Silver Shorts are Losing Control