In light of today’s rally in the precious metals sector (after first 30 minutes of today’s session) you might be wondering if we want to open a short position here as our target levels for gold, silver and mining stocks are being more or less reached. In short, not yet. The reason is the situation in the USD Index. The latter didn’t decline to the 95.6 - 95.7 - it’s relatively far from it. If we see a slide to this level, then the precious metals sector might move even higher on a temporary basis. This would create an even better shorting opportunity as the downside targets are relatively unchanged (we expect to see the HUI Index at the 80 level before the upcoming decline is over).

Consequently, we are not YET opening a short position in the precious metals sector as the risk of seeing higher prices on a very temporary basis is too big based on the situation in the USD Index. Consequently, the risk/reward ratio is not YET favorable enough to re-open the short position.

As always, we will keep you - our subscribers - informed.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief

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