We summarized yesterday's Market Alert in the following way:

Summing up, at this moment we suggest neither an open speculative nor an open investment position in gold, silver and mining stocks. If we get a confirmation (for example in the form of a move higher on tiny volume or a breakdown below previous lows in silver and mining stocks) that the next downswing is beginning, we will suggest re-opening short positions, and if the above-mentioned patterns are broken, we will suggest getting back on the long side of the market.

It turns out that yesterday there was "a move higher on tiny volume" in spot gold, GLD ETF, silver, SLV ETF, GDX ETF, and in multiple individual mining stocks. This is a sign of weakness in the market that is negative for the short term. The True Seasonals patterns will become negative shortly as well. Overall, silver and mining stocks continue to underperform gold in a steady manner - there has been no sharp downswing in the silver:gold ratio so far.

Consequently, we suggest opening small speculative short positions (half of the regular trading position) in silver and mining stocks. The performance of gold has been too strong recently for us to suggest opening a short position in the yellow metal (consequently, the risk/reward ratio of the short position in gold is less favorable than the one in the case of silver and mining stocks). If gold moves higher on low volume, we might suggest opening a short position in it as well.

The stop-loss levels are:

• Silver: $25.30
• GDX ETF: $32.2
• HUI Index: 305

Here's the up-to-date version of our trading/investment plan:

1. When gold moves to $1,305 open a long position in gold (with $1,268 as a stop-loss level).
2. When silver moves to $18.20 close the short position and open a long position in silver (with $17.65 as a stop-loss level).
3. When the XAU Index moves to 84, close the short position and open a long position in the mining stocks (with 80 in the XAU Index as a stop-loss level).

The above ($1,305, $18.20 and 84) are also the levels at which we suggest getting back on the long side of the precious metals market with half of your long-term investments. We will send a separate confirmation to get fully back in.

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 May, 2013 and we will send additional Market Alerts whenever appropriate. We have prolonged the time in which you - our subscribers - will receive Market Alerts daily for another full month.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA