Just a quick update as things are moving quite fast in the PMs.

We warned you that gold will plunge and it's doing exactly that. Gold futures are down almost $50 today as they moved below the February and March highs and also below the May lows. Virtually the only horizontal support level that wasn't broken today is the April low of $1,667. At the moment of writing these words gold is just $7 away from it and it's getting down quite fast. Will it be broken? And what happens next? To what price level gold moves then?

In our view, gold is quite likely to break below the above-mentioned April 21st low, and once it does that, it will open the way for waterfall selling. The above will serve as a very strong indication that this slide really IS different and it's not just another test of the previous highs.

The next support is at about $1,580 - at the early April lows. We don't think the decline will end there, but rather it will slide even lower. The above-mentioned $1,580 level could generate a quick rebound, though.

As we had indicated in today's regular Gold & Silver Trading Alert, the thing that would confirm that the bottom is in would be when gold moves up despite the continuation in USD's big upswing. So far, the USD's upswing has only begun and is really small. It seems that both moves will continue for at least several days.

As always, we'll keep you - our subscribers - informed.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager