Briefly: In our opinion, full (100% of the regular size of the position) speculative long positions in gold, silver and mining stocks are justified from the risk/reward perspective at the moment of publishing this alert.

In today’s first (regular) Gold & Silver Trading Alert, we wrote about the price target for the HUI Index at about 170.60 (it’s precisely 170.57) and we indicated that this level could be reached today.

It was almost reached as the HUI Index temporarily declined to 170.64 (just 0.07 above the above-mentioned level). This means that the key 61.8% Fibonacci retracement based on the entire 2016 rally was practically reached. This is yet another factor that has bullish implications for the short term.

On a relative basis, we can also say that the mining stocks are showing strength. While GLD moved to new intraday lows and SLV underperformed, GDX didn’t move below yesterday’s intraday low. In fact, at the moment of writing these words GDX is trading at $21.83, which is only 5 cents below the June 20 intraday low of $21.88. GLD is at $118.86, which is $1.30 below the June 20 intraday low of $120.16.

Speaking of relative performance, the USD Index is up by 0.56 today and gold is down by just $4.70 (at the moment of writing these words). That’s a very strong performance, because gold “should have” declined much more given a 0.49 rally in the USDX.

In today’s regular Gold & Silver Trading Alert, we wrote that more bullish signs would be required for us to open a long position here. We have more bullish signs and thus we view speculative long positions in gold, silver, and mining stocks as justified. For the record: at the moment of writing these words gold is trading at $1,253.90, silver is trading at $16.09 and GDX is trading at $21.83.

As always, we will keep you – our subscribers – informed.

To summarize:

Trading capital (supplementary part of the portfolio; our opinion): Full long positions (100% of the full position) in gold, silver and mining stocks are justified from the risk/reward perspective with the following stop-loss orders and initial target price levels:

• Gold: initial target price: $1,278; stop-loss: $1,239; initial target price for the UGLD ETN: $10.19; stop-loss for the UGLD ETN $8.97
• Silver: initial target price: $16.54; stop-loss: $15.88; initial target price for the USLV ETN: $9.97; stop-loss for the USLV ETN $8.78
• Mining stocks (price levels for the GDX ETF): initial target price: $22.39; stop-loss: $21.47; initial target price for the NUGT ETF: $25.36; stop-loss for the NUGT ETF $21.84

In case one wants to bet on junior mining stocks’ prices (we do not suggest doing so – we think senior mining stocks are more predictable in the case of short-term trades – if one wants to do it anyway, we provide the details), here are the stop-loss details and initial target prices:

• GDXJ ETF: initial target price: $32.97; stop-loss: $31.58
• JNUG ETF: initial target price: $14.38 stop-loss: $12.38

Long-term capital (core part of the portfolio; our opinion): No positions (in other words: cash)

Insurance capital (core part of the portfolio; our opinion): Full position

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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