gold trading, silver trading - daily alerts

przemyslaw-radomski

Gold & Silver Trading Alert #2

June 7, 2019, 11:50 AM Przemysław Radomski , CFA

Briefly: We are re-opening short positions in gold, silver, and mining stocks.

In Today's regular Gold & Silver Trading Alert, we wrote that it's best to be prepared for another move higher that would allow us to re-enter our short positions in gold, silver and mining stocks at better (higher) prices than the prices at which we had closed our positions. As the downside targets remain unchanged, this increases the profitability of the overall trade.

We wrote that the trigger for the rally and for the breakout might be the employment report. We wrote that the target for the USD Index is between 96.25 and 96.50. And we wrote that we ideally want to see silver's daily outperformance while miners underperform. We are seeing all of the above today.

Plus, the situation on the USD Index chart is much better than it appears at the first sight. The most bullish situation for a given market is when everything bad that could happen... Has indeed happened. The USD Index has been bombarded by bearish news in the past 5 trading days, starting last Friday. And yet, the US currency is far from its yearly lows. In fact, it's more or less at its January highs, at its rising short-term support line. The USD index is holding up very well relative to everything that happened recently and this strength is a bullish sign.

Consequently, we are re-opening our full speculative short positions in gold, silver and mining stocks.

To summarize:

Trading capital (supplementary part of the portfolio; our opinion): Full short position (250% of the full position) in gold, silver, and mining stocks is justified from the risk/reward perspective with the following stop-loss orders and exit profit-take price levels:

  • Gold: profit-take exit price: $1,241; stop-loss: $1,382; initial target price for the DGLD ETN: $51.87; stop-loss for the DGLD ETN $38.67
  • Silver: profit-take exit price: $13.81; stop-loss: $15.72; initial target price for the DSLV ETN: $39.38; stop-loss for the DSLV ETN $26.97
  • Mining stocks (price levels for the GDX ETF): profit-take exit price: $17.61; stop-loss: $24.17; initial target price for the DUST ETF: $34.28; stop-loss for the DUST ETF $13.37

In case one wants to bet on junior mining stocks' prices (we do not suggest doing so - we think senior mining stocks are more predictable in the case of short-term trades - if one wants to do it anyway, we provide the details), here are the stop-loss details and target prices:

  • GDXJ ETF: profit-take exit price: $24.71; stop-loss: $35.67
  • JDST ETF: profit-take exit price: $78.21 stop-loss: $30.97

Long-term capital (core part of the portfolio; our opinion): No positions (in other words: cash)

Insurance capital (core part of the portfolio; our opinion): Full position

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager

Did you enjoy the article? Share it with the others!

Gold Alerts

More

Apr Market Overview

Gold Market Overview

There has never been such a crisis. In matter of days, economies all over the world froze up. The stock markets plunged and the Wall Street experienced its largest single-day percentage drop since Black Monday in 1987. In response, the central banks shoots monetary bazookas while the governments are announcing mammoth stimulus packages.

If you feel lost, if you do not know what to think about the epidemic and its impact on the global economy and the gold market, or if you feel that the world has gone mad, you should definitely read this edition of the Market Overview.

As always, we focus on the gold market, so we analyze thoroughly how the epidemic, global recession and the resulting monetary policy and fiscal policy response will affect the price of the yellow metal.

Read more in the latest Market Overview report.

menu subelement hover background