Gold ended the previous week more or less where it had started it, even though the intra-day volatility was significant. Based on the long-term resistance lines, the outlook remains bearish for the medium term but quite unclear for the short-term. From the non-USD perspective, gold moved below the rising short-term rising support line and thus we have a confirmation for the bearish outlook.
Silver has actually declined last week by $0.36 / 1.61% even though it rallied so strongly right after Fed's no-tapering comments.
In terms of weekly closing prices, the general stock market pulled back to its previous 2013 high, closing slightly above it. This means that perhaps the breakout is being confirmed and there are no bearish implications just yet.
In the latest Premium Update we commented on the palladium market - we wrote that "(...) therefore the breakdown that we saw at the end of August was not invalidated.
From this point of view, the implications are bearish." Palladium price decreased on Friday and closed the week well below the declining resistance line - the outlook clearly remains bearish.
Meanwhile, the HUI Index moved back close to its 61.8% Fibonacci retracement level based on the entire 2000 - 2011 upswing, but failed to move above it. Actually, last week's action looks like another verification of a breakdown.
The most interesting thing happened (or more precisely - didn't happen) on the USD and Euro Indices. They didn't reach their target levels, which means that USD could decline further and euro could rally. This also means that precious metals and mining stocks could move higher shortly (we think this move will be only temporary after which bigger declines will be seen).
Consequently, what we wrote in the previous Market Alert, remains up-to-date.
To summarize:
Trading – PR: No positions.
Long-term investments: A half position in gold, silver, platinum and mining stocks. As far as long-term mining stock selection is concerned, we suggest using our tools before making purchases: the Golden StockPicker and the Silver StockPicker.
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.
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
