Gold, silver and mining stocks have declined substantially today. Silver is already below the March lows. Since the recently opened short positions are already visibly profitable, we have received several questions if our downside targets have already been reached.

In short, they have not. We think that this is the early stage of another big (meaning "more-than-$100-in-gold big") decline - perhaps the final one in the big correction that started in 2011.

Of course, there are no guarantees, but we think that gold will bottom around $1,000 - $1,100, silver close to $14 - $16, and we expect miners to move as low as their 2008 low (close to 150 in the HUI Index).

We might close the speculative short positions before these levels are reached, but it would just be to re-enter these short positions at higher prices, after a very short-term correction (exactly like we have done recently: short positions were opened on March 5 with gold at $1,337.50, then they were closed on April 4 with gold at $1,297.25 and then short positions were re-opened on April 10 with gold at $1,320.50).

At this time it seems that we will temporarily close the short positions in the entire sector when either the HUI or gold move to their 2013 lows. To be precise, we might close the short position when gold moves to $1,210 (slightly above the exact lows) or when the HUI moves to 197. We might close the short position in silver when it reaches the $18.60 level (slightly above the 2013 low), but at this time it's a tough call due to silver's strong underperformance.

The above is what we think as of today. It may change in the coming days or weeks, depending on how the situation evolves, and we will keep you - our subscribers - updated.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief

Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts