Yesterday's price targets have been mostly reached today, so we're sending an update. In short, we don't think that the rally is over yet. Its initial part may be over, and we may see a pullback tomorrow, especially that miners underperformed gold today, however it seems that another move up will be seen soon and keeping an open long position appears justified for most Investors. Day-Traders may want to close their positions only to re-open them in the following days, but we don't recommend this approach for most Investors.

The key market influencing precious metals is the USD Index and it looks like it's going to take a breather from its sharp rally soon. It's at its cyclical turning point and it touched two resistance levels: 38.2% Fibonacci retracement level and the 200-week moving average. Back in December 2009, similar pause in dollar's rally caused a 3-week rally in precious metals after which gold and silver moved lower once again. This may be the case also this time (we still believe that the probability that the final bottom for this decline is already in is about 55% - slightly more likely than not).

Another interesting phenomenon is that we've seen 3 important signals from our indicators based on yesterday's closing prices. Two extreme indicators flashed a signal (based on previous situations, these were "buy" signals) and the same was the case with SP Gold Bottom Indicator - precisely, we saw a long-term buy signal. This powerful combination suggests that betting on higher prices of precious metals is appropriate for most Investors and Traders.

Moreover, our SP Long-term Junior Indicator has recently flashed buy signal, which - accompanied by the current situation in the stock market - makes us change our view regarding juniors' performance. Namely, we now believe that it's a good idea to move part of one's capital from senior mining stocks to junior mining stocks. The latest ranking of juniors has been featured in the Sep 2nd 2011 Premium Update (http://www.sunshineprofits.com/premium_commentary/02-sep). We will post an updated version this Friday.

As always, we'll keep you updated if anything changes.

Thank you.

Sincerely,
Przemyslaw Radomski