Al's Insights – Wed 14 Dec, 2011

Worried about the price of gold? James Turk is not!

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Featuring:
Al KorelinJames Turk

Comments:
  1. On December 14, 2011 at 10:49 am,
    James B from Canada says:

    I am not worthy to listen to James Turk

    • On December 14, 2011 at 11:12 am,
      Big Al says:

      Trust me James B,

      You are absolutely incorrect!

      Big Al

  2. On December 14, 2011 at 10:50 am,
    Marc says:

    Big Al,
    JT is a rock of common sense!
    Marc

    • On December 14, 2011 at 11:13 am,
      Big Al says:

      HI Marc,

      Yes, he is a rock of common sense.

      Best,

      Big Al

    • On December 14, 2011 at 2:02 pm,
      Jerry 0^0TB says:

      Marc…..you are correct…about JT

  3. On December 14, 2011 at 11:24 am,
    EDWARD MURPHY says:

    big al:
    While I agree with Mr. Turk, in fairness, he has been wrong as many times as Mr.” if it hurts when dropped on my foot” gartman. Short term prognastication is 50/50 at best ,even my mentor J.Sinclaair stays away from the short term

    • On December 14, 2011 at 11:37 am,
      Big Al says:

      HI Edward,

      More proof that we must get as many opinions as we can and then make up our own minds!

      Big Al

    • On December 14, 2011 at 11:39 am,
      Anna Boeddeker says:

      Hi Edward, I would characterize Mr. Turk or Mr. Sinclair as “PM cheerleaders”.
      Don´t misunderstand me, this is not meant to be disrespectful, but it is helpfull sometimes to take the decision to get in.

      • On December 14, 2011 at 11:43 am,
        Big Al says:

        Hi again Anna,

        I don’t disagree with you. I simply respect James’ intellect and consequently his opinions.

        Best,

        Big Al

    • On December 14, 2011 at 12:09 pm,
      Matthew says:

      It is true that Turk is often too bullish in the short term, but he does stress that one should dollar cost average since the big trend is far from over. He was also very lonely in his call for a summer spike – which we got. Gartman, on the other hand, is a very widely followed TRADER. When he gets critical turns wrong, people get hurt. The last time he and Roubini were this bearish was when gold was $1100-$1200 in late ’09. Back then, Roubini even said “all the gold bugs who say gold is going to go to $1,500, $2,000, they’re just speaking nonsense.”
      So Turk could throw-off the silly short term scalpers, but he has remained on the right side of the market in the big picture. Those who have the nerve to stick with the big trend, make the biggest gains. The “safe” Dow and dollar are both down over 80% when measured in gold, over the last decade. Turk gets this; Gartman does not.

      • On December 14, 2011 at 1:22 pm,
        Peter says:

        JT is right. I say this not because I’m a “goldbug” with a vested interest, but because it makes perfect sense.

        The way I see it, gold is going down for three major reasons, and they are at cross purposes.

        1. The repeated interventions by “them.” When gold tried started to rally last week, hitting 1770 last week, there was concerted selling by “them” (read, Fed, IMF, BoE). This stopped the rally, which was perfectly reasonable, in its tracks. On Monday nigth, around 9 pm EST, I have now read, the Fed dumped more gold, after hours. All this serves to trigger algorithmic selling and reverses the momentum indicators. Since most of the paper market is traded electronically and all we have is computers responding to digital input – especially if the intervention happens after everyone has gone home – gold and the like, are more easily manipulated than before the advent of computer trading.

        2. All of this helps to create a bearish mindset and is intended to reinforce the idea that gold is not a safe haven, but at best an inflation hedge. Whenever gold begins to behave like a safe haven in the midst of turmoil and uncertainty, “they” hit it!

        3. Because of the genuine need to raise cash, much gold paper has been and is being sold. The huge amounts of cash, however, which are also sitting on the sidelines and might or would have come into gold are dissuaded from doing so.

        The net result is another “correction.” But what an artificial one it is! This raises the question of what the (theoretical) limits to their interference are.

        They say it’s darkest just before sunrise. The question is, is it darkest now, or will it get darker still? Looking at everything that is happening, I’d suspect it’s might get darker yet.

        But the sunrise, what would it be? The only circumstance, as far as I can tell under which “they” allow gold to rise is when clear and present inflation is in the cards, such as during a QE. Even then, they will occasionally throw ice water on the flames.

        It is possible that these takedowns have been engineered to establish a low base for gold to launch off when the next round of QE happens.

        • On December 14, 2011 at 8:31 pm,
          Michael Richard says:

          I’m agree with you Peter…

      • On December 14, 2011 at 2:01 pm,
        Jerry 0^0TB says:

        Mattew…..you are spot on ,,,as always….

      • On December 14, 2011 at 4:28 pm,
        castanheiro says:

        Right on target as usual.
        Much thanks,

        • On December 14, 2011 at 4:28 pm,
          castanheiro says:

          Sorry, this was to Matthew.

    • On December 15, 2011 at 2:13 pm,
      silverbug (Dave) says:

      I remember James Turk saying inearly 2008 that gold wuld go to 1500 that year. It made $1030 shortly afterwards, thencame the Bear Stearns crisis and a fall to 900 then the Lehman initiated mega credit contraction and it ended up bottoming at about $685 for the year. OK, by late 2009 gold was over 1200 and was 1500 by early 2011. However there was a huge drop in 2008 when JT was forecasting gold to go to 1500. This could be like 2008 with the Eurozone credit contraction. Gold topped at 1920 a while ago and was massively overbought. Now maybe it is oversold but how oversold can it go? there seems to be a dollar rally underway, it is over 80 on the USD index. Wither it eill fail to break much above 80 or the dollar is gonna fly and then watch out below for gold’s dollar price! That doesn’t mean that in a year or two it could be 2,000, 3,000, name your number – biut right now there is an enormous euro money supply that might want to go into dollars.

  4. On December 14, 2011 at 11:25 am,
    Anna Boeddeker says:

    Hi Big Al.
    Never sell your coins but save in the first place (pay cash to discipline own consumption) and wait for corrections to accumulate, it´s the best way to survive hard times ahead.
    Al, you bring us the tools to make our own judgement. Your blog is an important objective contribution. Thank you again.

    • On December 14, 2011 at 11:38 am,
      Big Al says:

      Good Morning Anna,

      Thank you for the kind words. Remember, we all learn from each other.

      Best,

      Big Al

    • On December 14, 2011 at 11:42 am,
      Jerry 0^0TB says:

      ANNA…DITTO

      • On December 14, 2011 at 11:56 am,
        Marc says:

        ANNA – DOUBLE DITTO

        • On December 14, 2011 at 4:27 pm,
          castanheiro says:

          ANNA, TRIPLE (“)s.

  5. On December 14, 2011 at 11:26 am,
    Tex says:

    A liquidity crisis seems to be developing with attendant forced selling…..the probable response from the Fed and others will be more money printing….any thoughts on how long before they start up the presses?

    • On December 14, 2011 at 11:39 am,
      Big Al says:

      HI Tex,

      Only an opinion, but we can’t possibly be too far away from that point. Will do a segment on the Weekend Show on this after I have had some time to really think about it.

      Best,

      Big Al

    • On December 14, 2011 at 1:09 pm,
      Anna Boeddeker says:

      Hi Tex, for a possible QE3 launch, watch for a reached level by $INDU 10,600 and $SPX 1,090-1,100

    • On December 14, 2011 at 10:53 pm,
      John W. Robertson says:

      This weekend I read somewhere about Bernanke and the Fed talking about stimulus for 2012 (wish I could remember where…too much to take in these days…but I did read it because it left me surprised that he’d even mention those words. Maybe a trial balloon.

      I think Anna’s comment on an index price-based trigger, or another financial freeze and need for liquidity as you say Tex, or ever-worsening responses to Treasury auctions could all be the cause of a formal QE announcement. As we are seeing, those things could happen anytime, and could develop in perhaps as little as 1 week’s time (the Fed came up with the $200 billion in a 3 day weekend).

  6. On December 14, 2011 at 11:34 am,
    timetoflyaway says:

    We are now in December, which I had marked as an important time (back in October) to check back on how things are going. So, just a quick comment to the naysayers of what I had written (predicted) a few months back:

    (1) compared to a year ago, silver HAS INDEED BEEN flatlined as I had said;
    (2) Herman Cain IS GONE, as I said he should be (despite the support people here so willingly gave him).

    • On December 14, 2011 at 11:41 am,
      Big Al says:

      Morning timetoflyaway,

      Yes, my friend, you were absolutely correct about silver.

      Regarding Mr. Cain, remember at the beginning I did support him and then as we all learned more I dropped any of my support. Regardless, you were also correct on this one.

      Best and thanks,

      Big Al

    • On December 14, 2011 at 6:04 pm,
      Ken says:

      Mr. Fly Away:

      Not all of us supported the Cainster. I said from the day he entered the race he was nothing but criminal clown Fedster.

      I would say many, if not most, people here have supported Ron Paul from day one. Heck, I have been following him since the late 90′s and supported him early in 2007.

      Ken

  7. On December 14, 2011 at 12:28 pm,
    frr says:

    James Turk,
    not only a good friend for almost a generation has had not only just an unbelievable accuracy in predicting pm prices over quite a long time. Maybe he always was a bit too early – though in the end up to now he’s always been vindicated.
    Reminds me of a New Orleans conference, where i’ve asked JT about silver – will have it installed in a month or two – and that was it.
    At the first “Munich Edelmetallmesse” 2003 ? I’ve brought Speakers and Co’s – including old Dr. Richebächer – and was after all totally fed up by the guys quadrupling their fares and just left. James, wife and son had a great time in our then invite only dinner … which I did and junior J. had had his heyday.
    Just an illustration of official frauds to maintain the criminal system of the PTB, the last resort of totally dumbed down execs, piping to the wrong piper.

    The real piper may show the total destruction done since the Reagan Administration – which also may have been part of the downturn, as the reality has long since taken over the so called peace dividend – a delusion played to max. idiocy – and now some of the old communist states – id est China, Russia et al are figuring more capitalist then the USA, weighed down by obligations, debts and intrigues.

    Whatever, Big Al, as you’re trying to name the game – so are we in the EU – and are not prone to condemn – not even GS or JPM, to have spread their tentacles to down their friend’s endeavours to persevere the status quo, vs a global re-alignment of economic forces to retain yesteryears status.
    Fugetabottit – noones waiting for any half educated, totally indebted gajins – as wem will persevere … any q’s?

    • On December 14, 2011 at 1:58 pm,
      Jerry 0^0TB says:

      YES…WHAT IS YOUR FIRST NAME…

  8. On December 14, 2011 at 1:05 pm,
    Nigel says:

    FYI Credit Suisse has called the bottom today for gold, with a target of $2000 for Q1 2012

  9. On December 14, 2011 at 1:53 pm,
    Jerry 0^0TB says:

    TURK’S ADVICE IS SOUND….AVERAGE IN …..

  10. On December 14, 2011 at 2:18 pm,
    Matthew says:

    This is the first time since Sept. 2008 that we’ve seen the RSI(14) below 30. Throw in the bearish squawking of Gartman and Roubini and this looks like an exceptional time to buy.
    For a good laugh, click here: http://www.businessweek.com/news/2011-12-14/death-of-gold-bull-market-seen-by-gartman-after-selling-metal.html

  11. On December 14, 2011 at 2:32 pm,
    Matthew says:
  12. On December 14, 2011 at 2:46 pm,
    frr says:

    Jerry O’ – if you mean me – it’s Florian from west of Vienna – Austria.

    Been around for quite a while, including the 1970′s and again since the early 1990′s, having had a good time until 1996 BRE-X and came back 1999 …

    Cheers frr

    • On December 14, 2011 at 7:11 pm,
      Jerry 0^0TB says:

      Florian…..glad to meet you…glad to have you on the blog….

      • On December 14, 2011 at 7:24 pm,
        Jerry 0^0TB says:

        Florian…just a note to you….I have been a silver bug since 1960….
        from Indianapolis, Indiana and Florida

  13. On December 14, 2011 at 3:20 pm,
    cocoa says:

    I am getting worried about the futures market Al and Rog . With MF global basically busted for comingling client money and losing it all PLUS this being a congenital problem across the board at all these institutions is it possible for the futures market to BREAK because no one trusts it? I heard one British hedge fund say he will never buy futures or options in the US again. Gerald Celente’s Dec gold contracts were strangled,lost and expired worthless held up in MF Global and the clearing agency. SEC, CME are near useless and JP Morgan just just to the front of the line on everyone and gets what is left.
    Furthermore, if there is no futures clearing agency worthwhile to use, then I am not sure how gold gets to market or priced properly for miners. And with that in mind, what can be a miners business model if they have no clearing agency or delivery mechanism OR credit to operate?
    It would appear to me that the paper market may be getting crushed because it’s essentially a derivative an cannot really offer physical gold at that price if there were a lot of requests for bullion

    • On December 14, 2011 at 3:40 pm,
      James C says:

      cocoa, Matthew, and Peter above all outlined some icebergs looming towards the global economy. I’m wondering if the US fed and BoE are unloading a lot of lot to make a big price difference. What will they do to repurchase it? Will it not repurchase and print money and take a higher hyperinflation risk? Seems by their actions, they don’t think its a problem.

    • On December 14, 2011 at 10:45 pm,
      John W. Robertson says:

      “And with that in mind, what can be a miners business model if they have no clearing agency or delivery mechanism OR credit to operate?”

      Maybe start the Korelin Venture Exchange?

      In all seriousness, the potential blow to confidence in clearing houses (and everything else really) has to cause some to take pause and wonder about broker-based investing.

  14. On December 14, 2011 at 4:05 pm,
    Lynn - (male) says:

    Hi Al,

    Defiinite buy opprotunity. I’m doing a few moves and still keeping my powder dry for when it goes to 1535 and 26. We are looking at explosin in price during the first half of next year.

    Preparing,
    Lynn

    • On December 14, 2011 at 4:24 pm,
      Jerry Mabie says:

      Don’t count on anything. Stay defensive. We’re still in the first half and already down by 14.

      • On December 14, 2011 at 4:34 pm,
        Lynn - (male) says:

        Matters not for the Pack this year ;)

      • On December 14, 2011 at 7:31 pm,
        Lynn - (male) says:

        Hey Jerry,

        Check this out –> http://youtu.be/I8NhRPo0WAo?hd=1 <–

        And believe me, I share/shared the same thoughts on foriegn policy as you do/did.

        Preparing,
        lynn

  15. On December 14, 2011 at 4:21 pm,
    Donald Moder says:

    Whether James Turk is right or wrong, you have to take his comments with a grain of salt. He owns/runs GoldMoney, the likelihood is that he going to talk his book. He has often predictions of where he believes gold will be at the end of the year, and those predictions are often way off. But he also stresses dollar cost averaging and looking at the long term, and for that he has been right over a decade. I read his book with John Rubino a few years ago and it his theories were laid out there, they are helpful and he has been mostly correct. Gartman is a trader, not long term like Turk. Gartman often says he is a long term gold bull. Most traders do not make money.

    • On December 14, 2011 at 5:07 pm,
      Matthew says:

      I’ll give Turk more than a grain of salt, not only because I agree with him, but because I believe he started GoldMoney because of the future he sees for gold. He did not become a proponent of gold after, or because of, GoldMoney. He also has the respect of many and is seen as credible and honest. I don’t believe that I’m going out on a limb when I say that few question his integrity. Of course $5 plus my opinion = …$5!

  16. On December 14, 2011 at 11:14 pm,
    Baten says:

    I am a customer of James Turks Goldmoney since over 3 years now(I was lucky enough to get in at 715USD)- and I have to say it is an excellent firm. I would not trust anybody else with my gold.
    But – as JT said – dont look at the price if you want to own gold for protection.
    If you are in it to make some fast money then my take is you should wait until the price falls a lot more that what it did in 2008 because this time the deleveraging is going to be greater (alltough probably not as fast as that time).
    I would not be surprised to see gold dip to 1300 or lower by february or march if there is no QE3.
    Better yet – at that time go for the miners since they will offer much better returns.
    Gold – you can hold long time, but my advice with the miners is to swing them regularly, since they have ups and downs of 40-50% all the time (look at their charts)

    • On December 15, 2011 at 9:06 am,
      Matthew says:

      As Jim Sinclair said: “One week ago they organized major swap line for all EU members. That is increasing liquidity.

      You and the market have fallen for the MOPE.”

  17. On December 15, 2011 at 10:21 am,
    cocoa says:

    James Turk created GoldMoney because he saw the need and he believes Gold and Silver are the antimatter for Fiat Trash. He is probably as honest a guy you can have in this sector. I think Sprott is around the same lines.