Gold and silver moved higher early today which is likely a response to the small move lower in the USD Index. We now have a situation in which precious metals move higher when USD declines just a little and when they do nothing when USD rallies (see: last Friday). Of course this is a very positive situation because it means that gold will either go up or do nothing on the next day and that it will generally trend higher. This also means that if dollar declines more significantly - something that is very likely based on its current overbought status - the rally in precious metals will accelerate.

The trend can still reverse, but today's price action is another clue that suggests that higher prices are ahead.

Full speculative long positions are suggested for gold and silver and mining stocks.

Naturally, we suggest remaining in the precious metals market with your long-term investments. In particular, don't let the bearish analyses, declining prices or sideway movements make you sell your long-term precious metals investments. It's a good time to be adding to the 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