As we have mentioned in last week's Premium Update "many important markets will be closed for Thanksgiving and the day after (or the trading will end sooner) and thus the trading week will be quite short." Consequently, we will not publish our regular Premium Update this week but instead we are sending out a short summary today. Naturally, we will send out a Market Alert if the market situation requires it regardless of the above.

In general, we have already summarized the situation in yesterday's Market Alert and points made in it are up-to-date (especially that precious metals are now close to the Monday closing prices), so we are going to use it as a base for this message.

What we have just seen (based on Monday's closing prices) are buy signals from the SP Gold Stock Extreme Indicator and the SP Gold Stock Bottom Indicator, which makes the outlook more bullish than it was the case last week. You can view these indicators here:

http://sunshineprofits.com/charts/sp-indicators-short-term-charts

The SP Gold Stock Extreme Indicator moved below its lower dashed line, which is not the signal that has been 100% accurate since 2008 (that would be the case if it moved above its upper dashed line). Nonetheless, the combination of buy signals from 3 of our indicators is something that proved to be reliable many times in the past (and at the same time it was very rare when such combinations were not followed by a rally), so we believe that the odds of an immediate move higher in the precious metals sector are approximately 70%.

As far as metals' price action is concerned, silver closed above its support levels and gold closed very insignificantly below our possible downside target $1,680 - and this move has already been invalidated. Gold touched its final Fibonacci retracement level (61.8%) based on the September - November rally, which means that the trend is still up (even though last week was not encouraging).

From the Japanese yen perspective gold moved once again to the lower border of the rising trading range, which suggests that a local bottom is in.

At the moment of writing these words gold is moving to $1,680 once again and the XAU Index in once again at the lower border of its long-term rising trend channel. Naturally, both levels provide support and silver appears to be forming a double-bottom as well.

Please keep in mind that silver is approaching its cyclical turning point, which means that a turnaround becomes even more likely. Speaking of turning points, the USD Index is also just about to touch its turning point and since it has (almost - 78.96 at the moment of writing) hit our target level for this rally (79), the probability for a downturn is very high (75%).

We've also seen a spike in volume in the DIA ETF (proxy for stock market) which has been a quite reliable bottom-is-in signal in the past months. So far the main stock indices did not rebound yet, but with a turnaround in the USD Index, this still seems to be the likely outcome.

Summing up, the short-term outlook for the precious metals market is bullish. If you have been waiting for a good buying opportunity, you may want to get into the market now. Our upside targets for gold is $1,900 and $40 for silver.

As always, we'll keep you updated if anything changes.

Thank you. Have a happy Thanksgiving holiday weekend and a profitable week!

Sincerely,
Przemyslaw Radomski