Even though prices are changing (i.e. declining) quickly, they bring very little changes to comment on, simply because the precious metals market is doing what it should be doing and what we have been describing as the likely outcome. Gold and silver are declining, while mining stocks are truly plunging. They didn't stop after breaking below the rising support line and the August high. No - they continued their slide without looking back. In yesterday's session they just broke below the July high. Think about it - a full month of gains erased in just one day. We told you that the decline might be more volatile than the upswing and that's exactly what's taking place right now.

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It's nothing to worry about, gold and silver will rally back up shortly - most analysts say right now and also said in the mid-90s.

...Only except that they won't - at least not for several months. Is anything different now than it was during other gold corrections in the past couple of months? Yes. There are three major details that prove that this time really is different. First, it's the fact that gold declined for two weeks in a row and it's the first time since April when this happened. Second, gold and silver declined even without USD's strength and the latter is refusing to decline even despite bearish news. Third, gold stocks just closed the week below their rising support line, and their August high. If anyone doubted whether mining stocks are underperforming, that's the final proof.

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And so, the rally in gold and silver has come to an end. Of course, one can say that yesterday's slide was just a daily correction, or a pause, but this is not the case. There are myriads of reasons for it, but we want to emphasize two of them. First, gold and silver plunged without practically any daily price change in the USD Index. Second, the decline continues also today. Silver is already about 50 cents lower, proving that there's more to the plunge than just yesterday's move. Still, there is some truth to the saying that nothing major happened yesterday. In fact, it's completely true. Given the number and importance of the bearish factors in play, we can say that the declines of yesterday and today indeed are barely noticeable - that huge a decline is likely still ahead. So, yes, nothing really major happened... Yet.

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Gold just had to do it. It had to move to new intraday highs. Even if it was just for a few hours, and even if it was just a $1.20 breakout. What does the move to new highs imply? Does it invalidate the analogy to what happened in 2011 or after almost all Labor Days since that time?

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Based on the situation in the USD Index, the analogy to what happened in mid-90s, and - most importantly from the short-term point of view - gold was supposed to decline similarly to how it had declined 8 years ago. Back in 2011, THE top formed right after the U.S. Labor Day and that started the multi-year decline. We saw yet another top in gold yesterday, and gold is indeed declining in today's pre-market trading, even without USD's help. The history is repeating, and the implications run deeper than 99% of investors think.

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