During yesterday's session gold once again moved to the declining resistance line early in the session after which it declined. Neither silver nor mining stocks moved above their respective resistance lines.

If you consider the very short-term support line in gold or mining stocks (basing them on the intra-day lows starting with the Oct 15 low), you'll see that they have just been broken. The breakdown has not been confirmed so far, but given the fact that gold, silver, the HUI Index and the HUI:gold ratio have all moved to medium-term resistance lines, it seems that the decline has already begun. Naturally, the verification of the breakdown will make the situation even more bearish. Therefore, the bearish indications that we highlighted yesterday remain up-to-date.

If you're wondering, an analogous line in silver was broken several days ago.

The USD Index moved slightly higher and the Euro Index declined. We still could see an opposite move as we have the long-term resistance slightly above the October high in case of the Euro Index, but - of course - it is not inevitable. We could have just seen the final top for this month and the Euro Index could decline and the USD Index could rally in the coming weeks and months. Simply put, if this doesn't happen immediately, and we see more weakness in the USD Index, we should not be very surprised.

To summarize:

Trading – PR: Half position: short position in gold, silver and mining stocks.

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

Stop-loss orders for the above-mentioned speculative short positions:

• Gold: $1,392
• Silver: $23.90
• HUI Index: 268
• GDX ETF: $28.80

As always, we'll keep you - our subscribers - 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) 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