The volume seen on the precious metals market was exceptionally tiny yesterday. If you've been following our analysis for some time, you know that whenever we spot something unusual about the market, we quickly start looking for any relevant (!) patterns that might be in play. This time is no different and we examined the market looking for days in the not-too-distant past when gold either simply traded on very low volume or when it rallied on very low volume. The more similar the days with the same situation (in this case - with very low volume), the more probable that the following price patterns will also repeat.

• Read more

Gold rallied last week and it was the biggest weekly gain (over 5%) that we saw for many months. In fact we didn't see the GLD ETF rally so much in one week since October 2011! This is a big factor, however, before acting on it as a bullish signal, one should examine also other factors, like corresponding volume. We have. We combined this record weekly gain with multiple other important factors and our experience in these markets and we created actionable Market Alert, which was just sent out / posted on our website. 

• Read more

In our view, the general stock market is likely to put negative pressure on gold in the coming days. Gold managed to rally along with the stock market yesterday, but one day is not enough to change the medium-term relationship just yet - which is bearish for gold. On the other hand, gold stocks are currently one of the most hated assets - you can read "The Trade: Dump the Gold Miners" as the headline on finance.yahoo.com - which can be viewed as a strong contrarian buy signal for the gold stocks and for the rest of the PM sector.

These are not easy times for those who are - correctly - interested in gold and silver. On one hand, we bet that you would really regret missing the next huge move up in gold, but on the other hand buying just ahead of another slide doesn't seem pleasant either.

We see a big opportunity in this situation and we have opened a trading position in gold, silver, and mining stocks. We also described the most probable outlook for gold for the coming weeks along with the trading plan and price levels for opening the next trades.

We described the trade, the reasoning behind it, the price targets, the stop-loss levels and we replied to a number of questions that we received this week - we have just posted our latest Premium Update with all these key details and much more.

• Read more

What a difference one day can make on the markets! Within the last 24 hours the USD Index plunged sharply from almost 84.50 below 82.50. More than 2 index points lower in mere hours.

The reason?

That's the key news for today. The most important quote is: "Bernanke said the Fed would likely slow the pace of its bond purchases by year end, with an eye to bringing the stimulus program to a close by mid-2014."

This is later than markets have anticipated. Market seems to have discounted in the price the QE tapering or perhaps the end of the stimulus, so this information is likely to have the effect analogous to an announcement of another round of QE (there's more QE than the markets had anticipated). This means higher stock indices, lower USD, and higher gold.

Stocks are already rallying in Europe. The USD Index plunged invalidating the previous breakout above the May 2013 highs. At the same time the Euro Index invalidated the head-and-shoulders pattern (which is another proof why waiting for a confirmation of a breakdown/breakout is so important).

Gold is already moving higher in pre-market trading today. Is the above a game-changer? Is this the final chance to get back into gold and silver before they take off? On one hand it seems to be the case - as we already wrote above - but then again, why didn't gold rally $100 higher given a 2 index-points drop in the USD Index? Huge drop in the dollar should ignite a huge rally in gold - and it didn't.

Is gold about to rally or plunge? We see an opportunity in the current situation an we suggested opening a trade today.

• Read more

Gold moved higher yesterday, but silver and mining stocks didn't confirm gold's move up. The volume on which GLD, SLV, and GDX moved higher yesterday was also weak - another bearish divergence. At the same time, we still have a situation in which "there's blood on the streets" (gold is making this kind of headlines: "Gold No Longer a Safe Haven, Strategist Says") which is a very bullish contrarian indicator.

• Read more