Briefly: we are increasing the stop-loss levels in gold by $10.

We already described today’s pre-market moves as something rather unimportant given the bigger picture, but since we wrote it, gold moved another several dollars higher and you may be wondering if the above remains up-to-date. It does. There are multiple strong long-term factors in place and today’s upswing is a small, unconfirmed short-term development that didn’t even take gold above its October highs.

Since the outlook didn’t change so much (and it remains very bearish), but the price is relatively close to our stop-loss levels, we decided to move the above higher by $10. We prefer to decrease the chance of being thrown out of the position by a somewhat random short-term price movement that might cause missing out on the huge follow-up decline. There are no other changes in our trading and investment positions.

As always, we’ll keep you – our subscribers – informed.

To summarize:

Trading capital (supplementary part of the portfolio; our opinion): Full short positions (250% of the full position) in gold, silver and mining stocks are justified from the risk/reward perspective with the following stop-loss orders and exit profit-take price levels:

• Gold: profit-take exit price: $1,062; stop-loss: $1,236; initial target price for the DGLD ETN: $82.96; stop-loss for the DGLD ETN $52.77
• Silver: profit-take exit price: $12.72; stop-loss: $15.16; initial target price for the DSLV ETN: $46.97; stop-loss for the DSLV ETN $31.37
• Mining stocks (price levels for the GDX ETF): profit-take exit price: $13.12; stop-loss: $19.61; initial target price for the DUST ETF: $80.97; stop-loss for the DUST ETF $33.37

Note: the above is a specific preparation for a possible sudden price drop, it does not reflect the most likely outcome. You will find a more detailed explanation in our August 1 Alert. 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 target prices:

• GDXJ ETF: profit-take exit price: $17.52; stop-loss: $29.43
• JDST ETF: initial target price: $154.97 stop-loss: $64.88

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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