Just a quick message as the precious metals sector moved higher today (silver outperforms once again) and one third of our position (mining stocks) hit it stop loss level. We are not re-opening this position right away, since miners might move even higher later today, but in general this does not change the medium-term outlook. In Monday’s Alert we featured the long-term HUI Index chart. It clearly shows that the current move higher remains in tune with the sharp - but temporary - upswing of the late 2012 and yesterday’s silver volume confirms this analogy even more. Back in late 2012, the HUI Index moved a bit above its 50% retracement of the preceding decline before the top was formed. The analogous retracement is currently at about 208. Today’s high in the HUI Index was 206, so it’s relatively close, but we can’t rule out a move to it or a bit above it before the next enormous slide starts. Please note that just as it was the case in 2012 and 2013, this entire move higher is likely to be erased and then mining stocks are likely to slide much lower before the decline is over.

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

Thank you.

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