As we’ve been expecting, the Fed left the rates unchanged and miners rallied sharply today, just as discussed in today’s first alert (GDX is up about 5% so far today). What does it imply for the following days?

The former (Fed’s decision) implies that the trends are now likely to continue normally. The uncertainty is - to a considerable extent - gone, and we can expect precious metals and mining stocks to move lower in the coming weeks. Weeks, but not necessarily days. After previous no-rate-hike announcements it took metals and miners a few days to finish reacting and it could be the case that a few days of higher prices will follow. The latter scenario is supported by strong performance of miners today (if they manage to close today’s session without a visible reversal, the implications will be bullish for the short term).

Consequently, we are preparing to open positions (either long or short ones, with the latter being more probable), but we don’t think that opening any positions is justified at this time. It could change shortly, even based on today’s closing prices and, as always, we’ll keep you - our subscribers - informed.

Thank you.

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

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