Briefly: In our opinion no speculative positions in gold, silver and mining stocks are now justified from the risk/reward perspective. However, day-traders might consider a small speculative long position in silver.
There's not much that we can comment on as far as yesterday's price action is concerned, as there were practically no changes in the precious metals market. Consequently, today's alert will be brief.
The only move that we can say something new about is what happened with the USD Index (chart courtesy of http://stockcharts.com).
Namely, it declined. The decline was visible, but not really significant. It didn't change anything as far as the outlook is concerned, because the move lower was too small to correct the previous upswing. We expect that more visible declines will continue.
Please note that the USD Index is moving close to its next cyclical turning point, which means that we are likely to either see a move lower right before it and a move higher (continuation of the rally) or no big moves before it and then a decline when the turning point is reached. Either way, we're likely to see a move lower in the USD Index in the coming days. If it declines shortly, then we can expect the rally to re-start at or very close to the turning point.
What about the reaction of the precious metals market? It was not absent, but delayed. Gold and silver are moving higher in pre-market trading today, and if you had opened a small speculative long position in silver, it's already profitable.
Summing up, it seems that the USD Index is not done declining and that precious metals are not done rallying, but the next big moves are still likely to be to the upside in case of the USD and down in case of PMs.
To summarize:
Trading capital (our opinion): No positions
Long-term capital (our opinion): No positions
Insurance capital (our opinion): Full position
Please note that a full position doesn’t mean using all of the capital for a given trade. You will find details on our thoughts on gold portfolio structuring in the Key Insights section on our website.
Our preferred ways to invest in and to trade gold along with the reasoning can be found in the how to buy gold section. Additionally, our preferred ETFs and ETNs can be found in our Gold & Silver ETF Ranking.
As always, we'll keep you - our subscribers - updated should our views on the market change. We will continue to send out Gold & Silver Trading Alerts on each trading day and we will send additional Alerts whenever appropriate.
The trading position presented above is the netted version of positions based on subjective signals (opinion) from your Editor, and the automated tools (SP Indicators and the upcoming self-similarity-based tool).
As a reminder, Gold & Silver Trading Alerts are posted before or on each trading day (we usually post them before the opening bell, but we don't promise doing that each day). If there's anything urgent, we will send you an additional small alert before posting the main one.
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief
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