In short, we think that re-opening short positions in gold, silver and mining stocks is a good idea right now (half of the regular trading position at this time).

Gold moved very (!) close the declining medium-term resistance line, which quite likely marks a local top, and we finally got a short-term bearish confirmation in the form of declining mining stocks. The HUI Index moved higher in the first minutes of today's session, but then reversed and declined once again. It looks that we're going to see a bearish shooting star candlestick in both: gold, and mining stocks. The implications will be bearish for the short term, and a short-term downswing will invalidate previous breakouts, which will likely have bearish implications of much greater importance.

Therefore, re-opening a short position here seems to be justified from the risk/reward perspective. As a reminder the short positions were closed when gold was trading at $1,237.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA