Gold, silver and mining stocks moved lower on Friday and it seems that they will not bounce today. So, the question is if the decline that we've mentioned in the precious metals market (with targets in the summary of the report) is already underway. We were not able to provide you with conclusive calls before it's close to the end of the session, as a sharp quick rally would invalidate Friday's bearish downswing. With about an hour before markets close in the US we believe it is relatively safe to say that today's session confirmed Friday's move. Moreover, both daily declines took place on relatively big volume, which is a bearish sign (and perhaps an early warning about a bigger decline). In other words, we no longer think that higher prices (than Thursday's close) are probable soon. Gold, silver, and mining stocks may bounce a bit, but at this point it seems that the trend remains down.

The general stock market moved lower on Friday and the volume accompanying that move was higher than what we've seen during previous daily rallies. This is a bearish sign, and makes the "double right shoulder of the head-and-shoulders formation" theory a little more probable. We'll have to wait for a few days to see how it plays out, because implications here could be very important to long-term precious metals Investors. Right now the situation is not bearish enough to sell long-term gold and silver investments, but we will certainly keep monitoring it.

Additionally, we have yet to see how other markets respond to dollar's strength (it's still likely that it will bounce very soon), but at this point we don't think it needs to translate to much higher precious metals' values.

Summing up, the upside targets from the latest Premium Update are no longer valid, but the downside targets are. Due to the fact that the volatility among mining stocks has been higher than that of gold, it might be a good idea for Traders to bet on lower gold prices now with a very small amount of one's speculative capital. Should the precious metals market move higher on low volume, one could additionally bet on mining stock's decline. Either way, we will send out another Market Alert if we get to this point. Long-term Investors are not advised to take action yet.

Thank you.

Sincerely,
Przemyslaw Radomski