Gold, silver and mining stocks declined slightly and this decline took place on relatively low volume. This is not necessary a bullish sign, it's neutral. When a given asset moves higher on low volume it's usually a bearish sign because it means that the buying power is drying up, however it doesn't necessarily work in the opposite case - stocks don't stay at the same position when there are no buyers and no sellers - they decline and thus the situation is not symmetrical.

Consequently, yesterday's decline has little implications.

In the previous Premium Update we wrote about the possible bearish head-and-shoulders formation that we could see in the case of gold and mining stocks - this pattern is still being formed. In fact, it's almost completed in the case of the GDX ETF - it closed right at the "neck" level of the pattern and further weakness could mean completion of the pattern and a decline to June lows (and then below them).

Overall, the situation on the precious metals market deteriorated slightly but it's not that clear that the short-term move up is completely over just yet. We will keep you updated.

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