The precious metals market has been declining rapidly today, however it seems that a bottom is being reached. Gold moved to its short-term support line and mining stocks moved to their 2008 highs and also a lower border of the rising trend channel. These are quite strong support lines and since they have just been reached, at least a short-term rally is likely to follow. Silver is at its long-term support line (and a cyclical turning point) as well. The sentiment is very bad and since the decline was so sharp, at least a short-term bounce appears likely.

Based on the above - and assuming that you have used only a part of your speculative capital for the previous bet on higher gold prices as we suggest in our Key Principles section - we believe that opening additional small speculative long position in gold is a good idea.

We will provide additional details in tomorrow's Premium Update.

Thank you.

Sincerely,
Przemyslaw Radomski