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

The precious metals market soared today and it’s now clear that you were able to enter the long positions practically right at the bottom, on Thursday, March 4. That’s not the reason, why I’m sending this message, though.

I’m sending it to confirm that my previous upside targets remain up-to-date. Until gold rallied it wasn’t clear if the $1,770 level in gold would indeed correspond to the $34 - $35 area in GDX. Now it’s much clearer.

Based on today’s rally (so far by $1.44 rally) GDX moved to $32.83.

At the moment of writing these words, gold is trading at $1,717 (and it’s after a ~$40 rally).

This means that for gold to reach my previous target level of about $1,770, it would need to slightly more than double today’s move – about $53.

What happens if the GDX ETF rallies a bit more than what it had rallied so far today? It would have to rally by more than $1.44 from $32.83, which means that it would be likely to move above $34.27.

However, let’s keep in mind that miners tend to rally particularly well in the initial part of the upswing, and then they underperform during the final part of the rally. So, when gold is above $1,750 or so, miners might already be rallying to a limited degree. Consequently, miners might rally above $34.27, but that is far from being certain. They might actually rally slightly less – perhaps to exactly $34 or so.

Consequently, my previous upside targets of $33.92 for the GDX, $60.92 for the NUGT and $18.92 for the GDXU remains up-to-date.

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

Thank you.

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