Silver moved above the stop-loss level in today's pre-market trading so the short position in this market was closed. At the same time we suggest keeping shorts open in case of gold and mining stocks. Silver can often break some resistance/support levels after which the opposite move ensues. Therefore, a move in silver alone (without confirmation from gold or miners) is not really meaningful for other parts of the precious metals sector. We are keeping the short positions but at the same time are keeping the stop-loss orders close.

Why do we bother "fighting the trend"? We're not, as the assumption here is that the medium-term trend is still down and what we have now is a short-term correction. The most important thing is what might be waiting just around the corner, based on the only really similar decline that we saw in this bull market - the one back in 2008. The following action back then was a very sharp decline, a one that you don't want to miss. The price of catching a big move like that is that at times you will get in too early - you can't always go short at the exact top, so the goal is simply to go in at the most favorable moment and keep your risk low, for instance using stop-loss orders. That's precisely what we're doing.

The USD Index is right at its medium-term support line and the S&P 500 Index is again at the lower of its rising medium-term support lines. The situation in Syria seems to be less of an issue than it is reported in the media. By that, we don't mean that the situation is not difficult. Lives of many people depend on it, which makes it very important - we only mean that markets seem to be overestimating the probability of the military conflict in the next few days. It could be the case that we hear about some sanctions or further threats but no actual military conflict and markets would reverse their recent moves: the USD and the US stocks would move up and precious metals would go lower.

To summarize:

Long-term capital: Half position in gold, silver, platinum and mining stocks.

Trading capital: Short position (half): gold, and mining stocks with the following stop-loss orders:

• Gold: $1,439
• HUI: 289
• GDX ETF: $32.6

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 September, 2013 and we will send additional Market Alerts whenever appropriate.

As a reminder, Market Alerts are posted before or on each trading day (we usually post them before the opening bell, but we don't promise doing that each day). If there's anything urgent we will send you an additional small alert before posting the main one.

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On an administrative note, as you know, several weeks ago we have started publishing free commentaries about the situation on the crude oil market. Today we are taking another step in this direction. The below report is a free, introductional version of the upcoming service: Sunshine Profits' Oil Updates. It includes several charts that feature both: gold and oil.

Oil Update: Oil, Oil Stocks, and Oil-Gold

Thank you.

Sincerely,
Przemyslaw Radomski, CFA