Gold and silver moved lower yesterday along with mining stocks but their move lower was relatively small. With declining momentum and an already extremely oversold situation in mining stocks, at least a rebound is very likely and it's likely to be seen soon. How soon? Probably today or later this week with the emphasis on today or tomorrow. At the moment of writing these words we already see gold, silver and platinum moving higher.

We have received a question as to how long did it take the GDX to actually turn around after the days with huge volume in previous cases. The answer is that the rebound was usually very quick - within 5 days or less. On Aug 16, 2007 miners bottomed on the huge-volume day which is an example of an immediate rebound. On Dec 14, 2011 we had a local bottom followed by a consolidation and another small move lower before a monthly rally begun, but still, the initial bottom was a good entry point. We will provide you with a detailed chart in the coming update, but in short, we expect to see higher prices this week.

We remain bullish on the precious metals sector and, just as we indicated previously, a full long position is suggested for gold and silver, and also for mining stocks.

Naturally, we suggest remaining in the precious metals market with your long-term investments. We sustain our belief that platinum will continue to outperform gold in the following months and it's not too late to take advantage of that.

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 February, 2013 and we will send additional Market Alerts whenever appropriate.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA