The precious metals sector moved lower today, but it doesn't change our views on it. We believe that precious metals will move higher rather sooner than later (most likely during the first half of April) and that being long gold, silver and mining stocks is justified from the risk/reward perspective.

While this is likely the reason behind today's move lower in the metals, Fed's recently released comments are long-term bullish for the precious metals sector.

"A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below its mandate-consistent rate of 2 percent over the medium run."

So, they are saying that they have likely not said their final word as far as printing money is concerned (which is nothing new to us). Some investors might have been expecting a confirmation of another round of QE and since there was none, markets (including stocks and metals) declined. This piece of information is not overly bearish, so it doesn't change points that we made in the latest Premium Update. Consequently, we remain bullish on the precious metals sector.

As always, we'll keep you updated. Thank you.

Sincerely,
Przemyslaw Radomski