As silver declined sharply yesterday, it moved to our SL level and declined below it by a few cents. It seems to be reversing on a very short-term basis, and at the moment of writing these words it’s back above the 61.8% Fibonacci retracement level based on the December - January rally. Today’s intraday bottom was also only 1 cent above the early December 2019 high. This means that if we are to see a lot of immediate-term volatility at and right after tomorrow’s interest rate decision, then what we saw today might have been the immediate-term bottom.

The rising support line on the GDX ETF chart was touched but it held as support, and gold’s decline is not particularly significant.

Consequently, we think that re-opening the long position in silver with a slightly lower stop-loss level is justified from the risk to reward point of view. The new SL is $17.28 (and $82.95 for the USLV ETF).

We would normally wait for the market to close in order to see the closing price. However, given this kind of volatility, silver could be much higher before we manage to send you anything tomorrow or before you might take action tomorrow. The SL is less than $0.20 cents below the current market price, so the risk is rather limited.

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

Thank you.

Sincerely,
Przemyslaw Radomski, CFA