Briefly:  In our opinion, no speculative positions in gold, silver and mining stocks are justified from the risk/reward perspective. However, we expect this to change shortly.

In the previous several days we reported that mining stocks moved lower and underperformed gold and that the implications were bearish. We saw exactly the opposite yesterday – GDX rallied almost 3% even though gold moved lower. That’s a big sign pointing to higher precious metals prices in the short term, confirming other short-term bullish indications that we discussed previously. Once the short-term rally follows (it seems that the upswing is already underway based on today’s price movement) and we see silver’s significant outperformance (which will likely serve as a bearish confirmation), we’ll most likely open short positions in the precious metals sector.

For now, the risk appears to big to open or to keep a speculative position in the precious metals sector and the same goes for crude oil (we are taking profits off the table today, in case of the previous short position in oil). As always – we will keep you – our subscribers – updated.

Thank you.

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

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