Turk - The Next Major Banking Crisis As Gold & Silver Surge

With gold and silver surging, today James Turk warned King World News that the world is about to see another major banking crisis.  Turk also spoke about why the metals were so strong today, as well as what investors should be doing to prepare themselves for the coming big banking crisis. 

Turk: “Gold has now risen two weeks in a row, Eric, and with the strong showing today, maybe it will end this week by scoring three in a row.  That would be a very positive development.  The really important point is that gold and silver are steadily moving further away from the low made on Monday, May 20th, as evidenced by their short-term moving averages. 

You will recall that both precious metals opened lower that day and sold off badly before putting in a remarkable upside reversal as the day wore on.  That day had all the earmarks of a selling climax in both gold and silver, so it could prove to be an important turning point and if so, the end of this long correction in the precious metals which would be a welcomed relief....

A selling climax occurs when the last hold-outs throw in the towel and sentiment is at rock-bottom.  That clearly was the case two weeks ago, yet sentiment remains low, which is bullish.  Few people are watching the action of the precious metals, except the buyers of physical bullion.

Last week a lot of the traders in paper gold exited their trading positions, as evidenced by the big drop in Comex open interest the past several days.  Then, you also have the fear factor playing a big part which is only natural given what happened to the metals over the past couple of months.

As an example, the weak close in the precious metals this past Friday naturally made a lot of people fearful that today would be a repeat of what happened two Mondays ago.  Instead, both precious metals have been strong all day, catching a lot of traders and shorts on the wrong foot.  A lot of shorts covered last week, so those who did not were probably in there buying today. 
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