The precious metals sector is taking a breather today. Gold and silver are basically where they closed yesterday and mining stocks are slightly lower. Platinum and palladium are slightly higher.
This doesn't provide us with any changes from yesterday, even when analyzed along with moves in the USD index and the general stock market. The USD Index and stock indices are not doing much today, so all in all we are where we were yesterday.
There is something going on that is indirectly bullish for the precious metals market, though. It's the verification of the breakout above the 2012 high in case of the S&P 500 Index. Yesterday was the 4th trading day in a row when the value of the index closed above its 2012 high - precisely above the highest daily closing price of 2012. The index is not above its 2012 intraday high, but the situation is definitely more bullish now than it was just a few days ago - before the breakout was "somewhat" verified. Such a breakout is an important development from a medium-term point of view, so we should look at it through the medium-term correlation coefficients, which suggests that this improvement of the situation in the general stock market is bullish for gold, silver, and mining stocks.
We remain bullish on the precious metals sector and just as we indicated previously, at this time half of the long position is suggested for gold and silver.
Naturally, we suggest remaining in the precious metals market with your long-term investments.
In other news, we have recently expanded the Dictionary section on our website. It now includes related terms and dialogs between 3 characters: Eric (beginning investor), John (experienced trader) and prof. Jill (long-term investor). If you are not sure what a given term means (and we use it in our updates), you can check it in the Dictionary section or ask us to create a definition. If you're experienced investor and you know what all the terms mean, we still encourage you to look at the definitions because the dialogs that we created might be entertaining, either directly, or maybe you will find our attempts to make them entertaining such :). Metals and miners are not doing much today, so you should be fine if you use a few minutes to check out a few definitions and dialogs. Not every definition has a dialog, but a lot of them do. For example - the ones listed below:
As always, we'll keep you updated should our views on the market change. We will continue to send out Market Alerts on a daily basis (except when Premium Updates are posted) at least until the end of January, 2013 and we will send additional Market Alerts whenever appropriate.
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
