In yesterday's Market Alert we wrote that we could see some kind of pause as Friday's and Thursday's sessions had been volatile in case of both: currency and precious metals markets. Most of the precious metals sector didn't do much (silver even declined modestly), but mining stocks moved visibly higher - over 3% in case of the GDX ETF. Are miners suggesting that the decline is over or is something else going on? We encourage you to read more in today's Market Alert.

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On Friday, the precious metals sector declined once again and the decline materialized on relatively big volume. The gold-stocks-to-gold ratio dropped sharply and it looks like it's about to break below its previous 2013 lows shortly.

The Euro Index plunged sharply last week (invalidating the breakout above the previous 2013 high) and the magnitude of the decline is by itself a bearish indication, as these types of moves - when seen after substantial rallies - usually meant that the worst was still ahead. Let's be clear here - gold can and has rallied even when the euro declined substantially. That was the case in 2010, for example. Additionally, please note that the Euro Index is now more or less where it was about 5 years ago and gold is now about $500 higher. If the only bearish factor for gold and the rest of the precious metals market was a good possibility of a serious decline in the Euro Index, we would have probably put less attention to it. However, now, gold is in a medium-term downtrend and it doesn't take much to ignite another substantial wave down - such a decline in the Euro Index (and a rally in the USD Index) is one possible spark.

Will gold decline now or is another pullback in the cards? What position should investors and traders take to make the most of this situation? These are two of the important questions that we answer in today's Market Alert.

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This week we ask if gold can be substituted in its role as a safe haven. Can VIX substitute gold and endure the short-term and systemic risks? We answer this question and see what is likely to happen on the markets in the short-term, while paying attention to the following facts:

• U. S. Dollar Index right after the cyclical turning point. Will it re-test the 2013 lows?
• The short-term uptrend in Euro
• Availability of the free capital that can fuel further rally in the US stock market
• Gold reached the declining resistance line
• Gold priced in Australian dollar, Euro, British Pound
• Another upward move in Silver
• Mining stocks' underperformance

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During yesterday's session gold once again moved to the declining resistance line early in the session after which it declined. The breakdown is not confirmed yet, and the long-term resistance line for the Euro Index has not yet been reached. Is it a good idea to open speculative positions in gold, silver and mining stocks yet? You will find specific suggestions and reasoning behind them in today's Market Alert.

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