Mining stocks moved considerably lower yesterday, once again strongly underperforming gold, which is a bearish indication. Gold formed a "gravestone doji" candlestick which is similar to the more popular "shooting star" candlestick (the difference is that in case of the former the open and close price are very similar or even identical while in case of the latter they are different).

At the same time we are approaching September which is one of the strongest months for gold. Will it rally this year as well?

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The USD Index is right at its medium-term support line and the S&P 500 Index is again at the lower of its rising medium-term support lines. The situation in Syria seems to be less of an issue than it is reported in the media. By that we don't mean that the situation is not difficult and lives of many people depend on it, which makes it very important - we mean that markets seem to be overestimating the probability of the military conflict in the next few days.

As always, overestimations create trading opportunities and we discuss one for the precious metals market (not for all sectors, though) in today's Market Alert.

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Market Alert #2 sent on August 27, 2013

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Gold moved to the $1,407 level on Monday, which is also the long-term resistance level based on the 38.2% Fibonacci retracement level (2012 - 2013 decline). This means that the rally might be over, especially that the chart featuring gold price in the euro seems to confirm this outlook - gold moved to the rising resistance line based on the 2005 and 2008 bottoms without breaking it.

However, at the same time metals moved higher despite a lack of decline in the USD Index and the general stock market. This means that the very recent price action is in tune which we usually see at this time of the year - according to the True Seasonal patterns - and its a bullish sign. What should investors and traders do given these contradictory signs?

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Gold moved to the $1,400 level on Friday, which is also the long-term resistance line based on the 2005 and 2008 lows. That's the most important rising support line that was broken in June. That's also the 38.2% Fibonacci retracement level based on the 2012 - 2013 decline. This means that the rally might be over.

However, at the same time metals moved higher despite a lack of decline in the USD Index and the general stock market. This means that Friday's action is in tune which we usually see at this time of the year - according to the True Seasonal patterns - and its a bullish sign. What should investors and traders do given these contradictory signs?

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