In short, we are increasing the size of the speculative long position in gold, silver, and mining stocks from 50% to 150% of the regular position.
In today’s first alert, we opened a small (50% of the regular position size) long position based on several bullish factors. The main two reasons due to which we didn’t open a bigger position were: mining stocks’ decline in the final part of yesterday’s session and the fact that the medium-term trend remains down.
The medium-term trend still remains down, but the mining stocks’ performance during today’s session STRONGLY supports higher, not lower prices. The reason is that GDX is showing exceptional strength by being just 5 cents lower while gold is down $9. It’s also forming a bullish reversal and while the session is not over yet, it seems quite likely that it will close the session without a meaningful decline and thus form a reversal candlestick.
Moreover, USDX moved to the target are that we marked on the USD chart (at the 61.8% Fibonacci retracement) and it’s now very likely that it will take a breather. Gold and silver also moved to their previous important lows and they are all moving back up.
All this is happening extremely close to the apex-based reversals and cyclical reversals and it’s a very powerful bullish combination (again, only for the short term).
It seems that metals and miners will move higher in the next 2 weeks or so and the big number of short-term factors that supports this outcome makes - in our opinion - a bigger long position justified.
For the record: at the moment of writing these words gold is trading at $1,306, and silver is trading at $16.10.
As always, we’ll keep you - our subscribers - updated.
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager