It seems that we have yet another day of back-and-forth movement in gold and silver that "aims" to discourage gold ownership. Precious metals moved, in fact, higher today, but such small rallies were invalidated many times in the past few weeks, so we still view it as part of the bottoming process.

Here's one fact that we didn't mention previously - earlier this month the XAU Index moved to its 61.8% Fibonacci retracement level based on the 2008 - 2010 rally. Of course, this is an important retracement and important bottom/top combination and this makes the support level strong as well.

The HUI Index didn't move to the 333 level, but it was relatively close to it, moving to 337.29. At this time the bottom could be in or we could see a couple more days of weakness before the bottom is reached.

The dollar index haven't declined so far, which is unusual given its cyclical turning point and its short-term overbought status. We still expect it to decline soon.

Full speculative long positions are suggested for gold and silver and half of the speculative long position is suggested for mining stocks.

Naturally, we suggest remaining in the precious metals market with your long-term investments. In particular, don't let the bearish analyses, declines in price or sideway movements make you sell your long-term precious metals investments. It's a good time to be adding to long-term gold & silver investments, not a bad one.

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.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA