Gold broke visibly below $1,760 today even though the USD Index moved lower and even temporarily moved to the 79.5 level. While miners didn't decline previously when stocks did, they declined today even though stocks held relatively well. These are signs of weakness and have bearish implications going forward.

Silver has already broken below its rising support line and both: gold and mining stocks are likely to close the week also below their respective rising support lines.

At this point it seems that small speculative long positions in the mining stocks should be closed and speculative short positions in the precious metals sector should be opened (gold, silver and mining stocks). We view the odds for a continuation of a decline at 70% here (we could or could not see another small move higher here, but based on the above-mentioned factors, it is no longer worth betting on) and our price targets are:

- Gold - $1,680 - $1,700
- Silver - $30 - $31
- GDX ETF - $48
- HUI Index - 450 - 460.

We do not suggest getting out of your long-term precious metals investments.

As always, we'll keep you updated should our views on the market change - even if it means sending another message in several minutes. Thank you.

Sincerely,
Przemyslaw Radomski, CFA