Briefly: In our opinion speculative long positions (half of the regular size) in gold, silver and mining stocks are justified from the risk/reward perspective.
Based on the first alert that we’ve sent you today the profitable short positions were already closed and the long position in the mining stocks has already been opened today (it’s already profitable, by the way).
The reason for which we decided to send a second alert today is that gold showed exceptional strength. The USD Index is very close to its critical resistance after another sizable daily decline and yet gold managed to erase today’s pre-market declines and even rally. That’s a very bullish sign.
Silver didn’t move to the very long-term resistance line, but it moved to the low that was formed in the pre-market trading on Monday/Sunday depending on one’s time zone. Gold was only a few dollars above our entry price. Given the strength that we have just seen on the market, waiting for the previously mentioned “entry levels” in gold and silver might be too risky (meaning risking missing the corrective upswing).
Trading capital (our opinion):
It seems that having small (half of the regular position) long positions is gold, silver and mining stocks is a good idea:
- Gold: stop-loss: $1,187, initial target price: $1,249
- Silver: stop-loss: $16.89, initial target price: $18.07
- Mining stocks (price levels for GDX ETF): stop-loss: $21.59, initial target price: $23.37
In case one wants to bet on higher junior mining stock ETFs, here are the stop-loss details and initial target prices:
- GDXJ entry: $34.36, stop-loss: $33.80, initial target price: $37.14
- JNUG entry: $12.82, stop-loss: $12.37, initial target price: $16.34
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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