Below you will find a quick summary of the report that we're preparing at this moment and that we will publish later today.

It may sound very strange, but it appears that the USD Index has been leading the way for precious metals and suggests higher prices are likely to be seen soon. The general stock market may enter a consolidation phase in the near-term but has had little influence on gold, silver and mining stocks recently.

Recent declines in precious metals prices have been clearly seen from a short-term point of view. This may appear scary to some. Note, however, that if price declines are short lived, this means little to speculative long positions. Also, please keep in mind that in the past none of the major upswings ended in a consolidation pattern, which makes it less likely that the rally is completely over now.

Many signals suggest that the trend is up. Long term support lines have only been touched not broken. Although there may seem to be increased risk with volume levels increasing and gold’s price declining, other signals from a technical analysis standpoint appear bullish. The target level of $1,600 still holds and the upside potential is actually even greater than what has been seen in the previous week. It's associated with bigger risk, so the risk to reward ratio did not change much, and consequently only a small long speculative position seems justified at this point.

Thank you.

Sincerely,
Przemyslaw Radomski