Gold declined yesterday, but the volume was not that significant. It currently looks like a verification of the breakout above the declining support line based on the October 2013 and December 2013 highs.

Yesterday we wrote the following:

"Palladium is approaching its declining support line. It moved to or slightly above this line 2 times in the past several months: in August and in late October. It meant that a local top was very close in both cases."

Palladium has already moved to the declining resistance line, so the local top might be based on this metal alone. From this perspective, the situation has become more bearish. However, from other perspectives, little has changed and what we wrote yesterday remains up-to-date:

"From the non-USD perspective, gold moved to the rising support line, based on the June and October bottoms, without breaking it. No changes here.

Silver and mining stocks also didn't move much and there's little to comment on.

The HUI to gold ratio moved higher, but not above the declining resistance line (the one based on the Oct 2012, Jan 2013, Aug 2013, and Oct 2013 tops). (...)

Just as we wrote in the previous Market Alert, it seems we could see some kind of strength in the sector (no that significant, though) that will provide us with a good shorting opportunity - better than we have right now.

Therefore, we suggest being / moving out of the market with the speculative capital right now and preparing to re-enter the short positions in the precious metals sector. We will let you know when we think it's a good idea to open these positions. For now it seems that it will be when gold is closer to $1,250 and the HUI closer to 215."

To summarize:

• Trading capital: No positions.
• Long-term capital: No positions.

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.

The trading position presented above is the netted version of positions based on subjective signals from your Editor, and the automated tools (SP Indicators and the upcoming self-similarity-based tool). You will find more information by following links in the summary of the latest Premium Update.

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