Today James Turk was interviewed out of Spain and Turk issued the following warning regarding the US dollar, “I am looking at the weekly chart for the last 2 1/2 years and my conclusion is that the dollar is forming a massive top. If we stop to consider that gold was rising while the dollar was basically going sideways during this period of time, imagine how rapidly gold will rise when the dollar starts falling.”
“What I’m watching here very carefully is how the dollar is reacting to events in the Middle-East and higher commodity prices. Brent crude is presently $115 and that is signaling higher inflation. It’s a signal that everybody around the world is watching. So watch the dollar index closely. It broke below 77 and the chart is starting to look heavy.
The dollar collapse is going to be the next big story. If I am right and the dollar really starts to dive, the implications are global in nature and I truly believe this event will shock the world.
When asked about gold Turk responded, “To me the most important thing is this huge base that we now have in gold under $1,400. I see it as a major launching pad that could easily take gold to my $1,800 target for this year.
When asked about silver specifically Turk stated, “I think the major message in silver is that every dip is well bid for. The shorts and other big players may gun for stops from time to time, but they can’t change the underlying trend, or the very bullish fundamental picture.
When the gold and silver markets start becoming disorderly, then we will know the metals are going to take a breather. But everything at the moment says we should be focusing on higher prices for both gold and silver.”
71 to 74 is seen as the last support if the dollar heads lower. If that support fails and the dollar breaks 71, then a waterfall decline with panic selling could come into play. Turk is right, that event would shock the world.