The precious metals sector moved a bit higher today, but this doesn't invalidate the points made yesterday. The USD Index took a small breather, but the strong short-term trend is still up. The general stock market moved higher and invalidated the breakdown that we mentioned yesterday. In fact, we mentioned that it was not confirmed, so the situation was not overly bearish.
The mining stocks moved higher as well, but the rally was quite small. The XAU Index is clearly (visible even from the 20-year perspective) below the level it had supposedly broken above several days ago. The HUI Index is above its previous highs, but it's clearly below the key support/resistance line. The picture therefore is bearish.
To be precise, the GDX ETF is slightly above the key support/resistance level (created based on previous major tops); however this ETF alone doesn't change the whole picture. Moreover, the small breakout in the GDX:GLD ratio has been invalidated, so - again - the situation appears bearish. The additional bearish point is that basically the whole precious metals sector moved higher today on low volume.
In yesterday's Market Alert we mentioned that it was too early to provide detailed targets and generally that is still the case today, however we believe that you're going to appreciate our best guess at this time. For gold, the targets remain at $1,600 and $1,700, and we believe that this time the decline is more likely to end at the lower of them. In case of silver, the next target is still in the $33-$34 range. The initial target for the GDX ETF is $60 and the final one is $50. Analogous levels for the HUI Index are 565 and 490.
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Important note from the editor regarding the next week's Premium Update:
This summer has not been anywhere as calm as the previous ones, so I decided not to take any breaks and focus on monitoring the situation. But now that my family keeps insisting on a small break that's about to recharge my energies and improve the quality of my work, I must listen. Therefore, I will be away from my office next week.
Following one of the core principles of my work, "the best or nothing", I must temporarily put the Premium Updates on hold for one week.
This means that there will be no Market Alert capabilities for Sunshine Profits between September 17 and September 25. Also, the Premium Update will not be published on September 23rd.
However, a quick update on the market situation will be posted as soon as possible when I get back, most likely on Monday, September 26th. The next issue of the Premium Update following next Thursday's will then be published on September 30.
All technical questions will be addressed as usual, with no interruptions, by our support team.
In this week's update, special attention will be given to the possibilities most likely to be seen during this period so that barring any catastrophic event, you will be aware ahead of time as to the best courses of action.
Your understanding is appreciated and I truly believe that our journey together will be stronger once I fully recharge and get eager to once again take the reins of this weekly publication.
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Thank you.
Sincerely,
Przemyslaw Radomski
