The HUI Index and gold have both moved slightly above our target levels: 215 and $1,250, respectively. The USD Index didn't decline today, so the above looks bullish. Unless gold's and HUI's breakouts are invalidated today, then it will be quite likely that gold will move even higher (perhaps to $1,280) before topping. The medium-term trend will remain down as long as there is no confirmed breakout above this level. At this time, however, it seems that staying out of the market instead of opening a short position right away is appropriate.
Opening a long position doesn't seem to be a good idea either, because the medium-term trend remains down and this means that the probability of a surprise move to the downside is relatively high. Also, it doesn't seem that gold would move more than $30 from here before declining once again - simply put the risk/reward ratio doesn't seem to justify opening any positions at this time.
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
PS. Since today's Premium Update was substituted with the Gold & Silver Trading Alert, you might be wondering if there is any place where you can read Matt Machaj's, PhD analysis of the fundamental issues that would be added at the top of a regular Premium Update. The answer is yes, it was just posted in the articles section on the website and this essay is exactly what we would have started today's Premium Update with, if you haven't told us that you preferred our new approach. You can access it using the following link:
