Thanks to yesterday's rally, gold corrected half of the preceding Aug-Oct downswing and moved to the 50-day moving average. Gold's breakout was visible also from the non-USD perspective. Gold priced in the Australian dollar moved higher and closed above the declining resistance line. The SLV ETF moved visibly above the declining resistance line. However, it's about to run into its cyclical turning point (as is the USD Index) and let's keep in mind that tops can (and have done so in the recent past) form slightly before the turning points.

Is it worth considering opening long or short positions or is it best to wait for clearer signals on the precious metals market? This is the key question that we deal with in today's Market Alert.

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On Monday the GLD ETF has moved slightly higher on extremely low volume. The size of the volume suggests that we are close to a major move. Low volume means that neither bears, nor bulls were willing to make transactions at this time. Both camps seem to be waiting for a more decisive move to either add to the existing positions or to throw in the towel and close the existing ones. In case of spot gold, we saw another failed attempt to move above the 38.2% Fibonacci retracement level. The situation is becoming more an more tense with each day as, at the same time, we have an additional daily close above the declining resistance line, and a close below the 38.2% retracement.

On Tuesday high volatility became a fact as gold rallied after weaker-than-expected number of jobs that were created in the US in September. What's next and how should one position themselves given this sharp upswing? We sent out 2 Market Alerts today (so far) - read them and find out.

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The GLD ETF has moved slightly higher on extremely low volume. The size of the volume suggests that we are close to a major move. Low volume means that neither bears, nor bulls were willing to make transactions at this time. Both camps seem to be waiting for a more decisive move to either add to the existing positions or to throw in the towel and close the existing ones. In case of spot gold, we saw another failed attempt to move above the 38.2% Fibonacci retracement level. The situation is becoming more an more tense with each day as, at the same time, we have an additional daily close above the declining resistance line, and a close below the 38.2% retracement.

Fortunately, there are some clues in other markets that can help us identify the next likely price move. You'll find details in today's Market Alert.

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The GLD ETF moved back to the previously-broken resistance line without invalidating the breakout. In case of spot gold, we didn't see a move to the declining support line, but we saw an invalidation of the intraday move above the 38.2% Fibonacci retracement level.

There was no breakout above the declining resistance line in case of gold priced in Australian dollars, though, and other non-USD gold charts remain bearish as well.

Has gold truly broken out or has it just invalidated the breakout? The answer to this question is the key to determining the next move in the entire precious metals sector. Fortunately, there are some clues in other markets that can help us identify the next likely price move. You'll find details in today's Market Alert.

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This week:

• Gold rallies on Thursday by reasons some would never expect
• Dollar drops below the 80 level, and draws an interesting picture for the future
• Stocks don’t invalidate breakout despite of the last week’s downward move
• Gold invalidates the “head and shoulders” pattern once again
• Thursday’s gold rally affects silver and mining stocks.

How strong are the foundations upon which the dollar system stands? As a matter of fact, it’s in trouble even if the dollar is not doing badly in the currency markets. As long as the Fed stays on its interventionist course, gold will likely keep on shining... In this week’s Update we evaluate the most important market developments to see if gold is still shiny or is it beginning to fade.

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