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

I warned you that given the self-similar patterns in gold, it was only a matter of time before the yellow metal slides. I also told you that the employment numbers could actually provide a positive surprise given i.a. that the enhanced unemployment benefits are becoming a thing of the past.

Indeed, the jobs report was more positive than expected (943K jobs added vs. 870K expected), which greatly limits the probability that the Fed will delay tapering for much longer. In other words, strong jobs report is likely to make Fed more hawkish. This is bad news for gold, and since the yellow metal seems to have been waiting for a good reason to decline, while ignoring bullish news, this might have been the spark that was needed to ignite the next big downswing.

So far, gold is down by “only” $27 in today’s pre-market trading, but it seems that it could decline more significantly quite soon.

Consequently, if you haven’t finished your purchases aiming to profit from the upcoming decline in the junior mining stocks (or a different part of the precious metals market, if that’s what you prefer to do), it might be high time to do so. Of course, there are no certainties in any market, and I can’t promise you any kind of performance, I can tell you that if I didn’t have my above-mentioned short position in the junior miners intact, I would have entered it today.

It seems to me that the short positions in junior miners are going to increase substantially in the following weeks.

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

Thank you.

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