Gold moved below our stop-loss of $1,572 and consequently half of the speculative long position was closed. Neither silver nor mining stocks moved below their stop-loss levels.

Just a few days ago there was a video on finance.yahoo.com that commented on gold as something that had been losing value. Today we received 2 notifications from people that are not investors about gold's decline - they read it on some gossip sites. This is a sign of a bottom. The opposite (extreme optimism) would be sign of a top being close. We're definitely not seeing that. What we see is extreme pessimism and investors throwing in towels and selling (note the huge volume recently). There's blood on the street and that's why this is the time to be brave. Most investors lose money so we generally want to do the opposite to what the majority does. That's why we're happy with our long-term precious metals holdings right now, even though they have declined in value recently.

Gold didn't move to $1,550 yesterday (which we had indicated as the next buying opportunity) but it was only $8 from that level. We based that level on the declining support line based on the 2011 and Feb 2012 highs and since gold declined to it earlier than we had expected (this is a declining line and in several days it would have been lower), we view the target as being in.

Consequently, we once again suggest going long gold. The stop-loss at this time is at $1,544. Stop-loss orders for silver and HUI Index remain at: $28.20 and 352, respectively.

This means that, at this time, full speculative long positions are suggested for gold, silver, and mining stocks.

Naturally, we suggest remaining in the precious metals market with your long-term investments.

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 March, 2013 and we will send additional Market Alerts whenever appropriate. In other words, we have decided to keep you informed on a daily basis for another full month.

Of course, we will provide a more detailed discussion of the above points in tomorrow's Premium Update.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA