Kingworldnews.com
With silver trading at $33.50 and gold breaking above $1,400 in early trading in London, King World News today interviewed James Turk out of Spain to get his thoughts. Turk remarked, “The backwardation that we have been talking about has now blown out to 73 cents, that is unprecedented. I find that number to be completely astounding! Where are the arbitrageurs? They could make a fortune. This suggests to me that the arbitrageurs are out of the market because they don’t have the physical metal to sell to deal with the imbalance.”
Turk continues:
“The fact that arbitrageurs are not pouncing on this huge bakcwardation is just further evidence of how little physical silver is available.
Going back the KWN blog we did on February 10th, this backwardation in silver has potentially huge implications for the US dollar. Metal goes into backwardation for two reasons - Either short supply, or nobody wants to accept fiat currency. We know the backwardation in silver is because the supply of physical metal is so short.
But the lingering question in my mind is whether the strong hands who hold silver are unwilling to take a fiat currency. If that is the case, and this backwardation in silver eventually leads to a backwardation in gold, the implications for the US dollar, and indeed all of the fiat currencies in the world are ominous.”
When asked about gold specifically Turk stated, “Eric, here we have gold in London trading above $1,400 this morning. For the first time in a couple of weeks, the gold chart is starting to show real strength. I expect gold to be probing the old high of around $1,430 by the end of this week, given the strength we are already seeing. The old high should not provide much resistance, so expect new record high prices in gold soon.”
Read more @ ORIGINAL SOURCE
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