Yesterday, we saw another move higher in gold, silver and mining stocks, but - again - this move didn't change anything as far the outlook for the precious metals is concerned.
We'll start by quoting yesterday's Market Alert:
"We were expecting to see a small corrective upswing in gold that wasn't likely to invalidate the breakdown below the long-term rising resistance line - and that's what we saw in the past several days. Mining stocks moved most visibly higher, but they didn't invalidate their key breakdowns, so the move didn't change much, if anything. There was no invalidation in case of silver either. The white metal remains below the rising, long-term support/resistance lines."
The above remains up-to-date as there has been no breakout above meaningful resistance lines.
The GLD ETF moved higher on tiny volume, which might be partly explained by the fact that exchanges were not open in some parts of the world, but still, it's hard to view a move higher as bullish when so few investors contributed to it.
Silver has moved higher in the past few days, which can be viewed as a... bearish indication because the white metal is right at its cyclical turning point and since the most recent move is up, then the turning point becomes a bearish indication.
There was a huge daily rally in platinum, which can be attributed at least to a considerable extent to the significant rally in the stock market. Generally, this doesn't imply much for the rest of the precious metals sector - similar price moves in platinum in the past didn't result in any particular price moves in the rest of the precious metals sector - at least not with any significant regularity suggesting that there is a repetitive pattern relating to platinum's temporary outperformance.
To summarize:
Trading – PR: Short position (half): gold and mining stocks.
Long-term investments: No positions.
Stop-loss orders for the short position:
- Gold: $1,240
- GDX ETF: $22.20
Profit-take level (close both positions - in gold and mining stocks and take money off the table at this level):
- Gold: $1,160
As a reminder, the next Premium Update will be posted on Monday and it will include the analysis of scenarios that you may expect in the following week along with our preferred reaction in each case. You will be prepared whatever happens next week. The markets will be closed on New Year's Day and your Editor will take 3 days off, which means there will most likely be no Market Alerts / Premium Updates from Tuesday to Friday (we might be able to send/post them, but we can't guarantee it for these 3 days). You will receive an Alert on or before Monday, Jan 6, 2014 and then you will receive them normally on each trading day (plus Premium Updates every Friday). As mentioned earlier, we will provide you with an early heads-up in Monday's Premium Update.
In the recent survey (thank you for participating) you told us that you are indeed interested (or at least that a significant number of you is interested) in both: Bitcoin Trading Alerts and Forex Trading Alerts, so we will also provide something extra for you next week - the initial versions of these premium services. We'll provide more details in Monday's Premium Update.
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
