Well now, without further delay, let’s get right to this week’s exclusive interview.

Mike Gleason: It is my privilege now to welcome back David Smith, senior analyst at The Morgan Report and regular contributor to MoneyMetals.com. David, thanks for joining us again and how are you?

David Smith: I'm just fine, Mike. It's great to be back.

Mike Gleason: Well, David, not too long ago you wrote an article for our site about how gold and silver were getting ready for an historic run you called it. So, before we start discussing some of the market action here recently, fill our listeners in on why you believe things were set up and are set up for us to see a good run in the metals here.

David Smith: Well, we've had a very trying period since 2011 when a lot of people have been really worn out and torn out and left the market because the prices have declined substantially and what is really a normal reaction in a very large bull market, what we call a cyclical reaction within a secular bull market. The prices, if you look at other times in history where this has happened, the prices did not decline more than what you would expect but it's pretty hard when you see prices drop by 40 or 50% over five years.

Last year kind of started to turn things around and then we had a correction from that. And now we're building this very large sideways space, which all sorts of indicators are indicating that we're now ready to launch into the next part of the bull market, which will be as David Morgan has always taught it will be the most profitable part of the whole thing and we're looking at probably three to five years of advancing prices and maybe more in gold and silver as this thing gets under way. So we're building this base. It's moved about $1,300, gold as you know last week and held there. So things are going to be going a very positive way for the bulls going forward here.

Mike Gleason: So the metals have been showing some good signs of life here. We've got gold at its high for the year. Silver is still lagging a bit and hasn't reached its high for the year yet. Now, I'm not sure if you're thinking the same thing, but things are feeling a little bit different this time in terms of the advance that we're seeing and the set up that you just alluded to. Do you think silver will finally start outperforming? And how much of a run do you see in silver prices in the next say six to 12 months?

David Smith: Silver will at some point start outperforming. It's a metal that surprises people. They're looking at it now, and they say well why isn't it stronger in relationship to gold? Over time there's about an 85% correlation. In other words, if gold is moving up, silver will too, but it doesn't do that on a daily basis or even a weekly basis. And what it likes to do is to make people think it's going to stay weak for a long time and then all of a sudden there's a price explosion. So, one of these days, we'll wake up and silver will be up 75 cents on the day and people will go “where did that come from?” When the reality is what's going on under the hood all along and it was taking its time. Then all of a sudden they go into the upside.

These different things that are going on with big money moving in some hedge funds into the metals space and the mining stocks being more strongly supported and the incredible demand, which just keeps on growing and going from China and India and now Turkey. Turkey's become the third largest importer of gold now in the world. All of these things augur very positively for the precious metals. That doesn't even discuss the supply concerns that are starting to accrue.

Mike Gleason: I know it's been maybe a little bit difficult for a lot of the silver bulls out there to see it just kind of go sideways for all this time these last four or five years now. But what is the saying? The bigger the base...

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