Gold moved significantly higher once again, silver moved higher as well and miners' move was also visible, but much smaller than what we saw yesterday.

What happened? Did the market finally respond to the events in the Ukraine with normal force instead of a relatively small one? It could be the case, but we would then expect gold to rally much further and silver to rally less. So what happened? We quite often see silver outperform gold on a temporary basis when either the general public's interest in the precious metals market suddenly increases and right before silver's big declines. The two could happen at the same time, of course.

The important news today is the news itself - gold made headlines today on finance.yahoo.com - the video presents views bullish on gold and assumes the decline in the USD Index is one of the key factors for it.

As you know, and as we have been explaining in our Gold & Silver Trading Alerts, the medium-term outlook in the currency markets hasn't changed recently. The USD Index is after a long-term breakout and the Euro Index failed to move above its long-term resistance line. This does not bode well for metals and miners.

Still, on a short-term basis, the fact that gold caught the attention of the general investment public resulted in a short-term upswing in the sector - including silver.

When gold is making headlines, it’s usually good to consider exiting the sector, not adding to ones positions. Consequently, we think that keeping the positions (and the spread between gold, silver and miners) intact is a good idea. While the headline effect is likely temporary, the situation in Ukraine has much greater implications.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief.
Gold & Silver Trading Alerts