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

In today’s regular Gold & Silver Trading Alert (in particular, in today’s premium video), I mentioned that we might see a very short-term rally and that if we saw a move above the declining red resistance line in the GDX ETF, it would not be something that’s likely to last. I also mentioned that in this case, the outlook would still remain bearish and that such a move would be likely to be reversed shortly.

Well, we saw exactly that in today’s early trading. Gold, silver, and mining stocks are moving higher, and the mining stocks jumped up quite notably – with GDX moving above its red resistance line.

Why did it happen? There’s never a way to reply to that question with 100% certainty as far as market moves are concerned. However, it seems that it’s one of the phenomena that happens from time to time, and it’s based on an important announcement that is about to be released later today. The news that is about to hit the markets soon is the release of FOMC meeting minutes.

Some traders are likely expecting it to impact the market in a certain way, while the others expect it to impact the market in the opposite way and each side is trying to position itself before the news is actually released. You saw the effect in today’s early trading when gold first rallied, then plunged, and then rallied once again.

What does this imply for us? It simply serves as a reminder that patience is an important virtue for investors and traders. The medium-term downtrend remains intact, and the 2013 performance is likely being repeated, just like it’s been repeated for many weeks now.

In other words, today’s price moves are inconsequential in my view, and the outlook for the medium term remains bearish. Furthermore, it seems to me that we’ll see another short-term downswing shortly.

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

Thank you.

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