By Sandra Ward
29 May 2006
An Interview With James Turk
NOT ONLY DID HE PINPOINT THE BEGINNING of the current bull market in gold in these pages in September 2002, but he has been spot-on in continuing to assess the direction of the metal and the drivers behind its move. Turk, a longtime authority on gold and other precious metals, is the founder of GoldMoney.com, a company that enables online cross-border commercial transactions using gold as a currency. He is also a co-author of The Coming Collapse of the Dollar, published in 2004 by Doubleday. As you might surmise from the title of the book, Turk sees plenty of room for gold to climb higher. Here's a glimpse into his thinking.
Barron's: You've been right on the price of gold all the way up.
Turk: The theme has been correct. There are problems with the dollar, and that's being reflected in a higher gold price. So, truth be told, it's not that gold is going higher -- it's that the dollar is going lower. An ounce of gold still purchases as much crude oil, essentially as it did 50 years ago, but that can't be said about dollars.
Barron's: Do you have a new gold-price target?
Turk: It is going much higher, and the $8,000 [per ounce] I mentioned a couple of years ago is probably as good a target as any.
Barron's: Some reports say $2,000 is reasonable.
Turk: I don't rule that out as a near-term spike. There are two aspects to what's driving the gold price: First, there is strong physical demand around the world. When gold crossed the $500-an-ounce level, people started buying gold in anticipation of monetary problems. Second, the physical demand for gold is causing a huge problem for the gold shorts. There has been a large gold carry trade in place. It is very possible gold could have a massive spike in the next six to 12 months to as high as $2,000, driven by these factors.