In the latest Market Alert, and in yesterday's Premium Update, we have emphasized that if the market moves lower and it takes place on a tiny volume than it will mean that the short position in gold, silver, and mining stocks should be closed.

While gold and silver have barely moved yesterday, mining stocks declined. This is generally a bearish factor by itself, but in this case the volume is important - and it was low. Price did not decline because people rushed to close their positions, but rather because they were not willing to take any position. Whatever the reason was for the latter (perhaps Traders take some time off in order to prepare for the coming Holidays), it is likely that it had also contributed to the fact that market moved higher on low volume on Monday. Consequently, the previous bearish signal, which made us send the previous Market Alert, has been invalidated.

Since betting on lower values of precious metals is profitable under only particularly bearish circumstances, we believe that exiting the short position here would be appropriate. The market may still move lower, but at this point the situation is once again too unclear for us to suggest any speculative position. Please keep in mind that one does not need to have an open position at all times - using the risk/reward ratio as a guide should help you maximize your returns, and at this point it simply suggests waiting for a better opportunity to re-open a position.

As always, we will keep you updated, should anything change.

Thank you for using the Premium Service.

Sincerely, Przemyslaw Radomski