James Turk: Silver Likely to Hit $50 in August

As we just wrote here, James Turk shares our assessment that the cartel is attempting to knock gold back under $1600 on options expiration.  Turk feels that should the cartel be unsuccessful in their efforts to induce a gold close below $1600 on options expiry, there is a large potential for a subsequent upwards explosion in gold, resulting in a very real possibility of $50 silver in August.
Still think our $70 in 2011 silver call is not possible?

“If gold cannot be pushed back below $1,600 during option expiry, we should take that to mean that the shorts are losing control.  The consequences of that would be the potential for an upside explosion, which as you know is consistent with what I have been expecting for the gold price this summer.  

Here is another interesting development Eric, the support under $1,600 regardless of how you measure it looks solid.  Asian buying has been following the market up since gold went over $1,000.  I was surprised to see how quickly the bids under $1,600 developed.  So my view of market conditions at the moment is that as bullish as I am, even I might be surprised by how quickly gold accelerates from here.
“The situation is just as bullish.  The fact that we are breaking through $40, which has provided overhead resistance for so long, is a clear sign that the shorts are losing control.  The upper hand is shifting to the buyers of physical silver. 

My near-term target is still something in the mid $40’s, but if gold starts moving higher as I expect, silver will be testing that $50 level by next month.  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.”Click here for more from KWN: