We promised to keep sending you daily Market Alerts at least until the end of May, so here we are. The precious metals market didn't do much on Friday, so everything that we wrote in Friday's Premium Update remains up-to-date. Yes, there was a visible back-and-forth movement on an intra-day basis, but overall gold, silver and mining stocks closed very close to where they had closed on the preceding day.
Stocks (S&P 500 Index) closed the week above their previous highs, which is a bullish confirmation of what we wrote earlier - that stocks in general are likely to move higher - at least in nominal terms.
Summing up, we continue to believe that betting on lower values of silver and mining stocks is justified from the risk/reward point of view. It's probably a good idea in case of gold as well, but we are not that convinced, so we're staying out. In other words, we continue to suggest having speculative short positions in silver and mining stocks.
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:
- When gold moves to $1,305 open a long position in gold (with $1,268 as a stop-loss level).
- 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).
- 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
