Briefly: In our opinion speculative long positions in gold, silver and mining stocks are justified from the risk/reward perspective.
The position in the mining stocks was closed automatically, but since the outlook remains bullish, it seems that re-entering it is justified from the risk/reward perspective. At the same time, it seems that moving stop-loss orders a bit lower in case of gold and silver is also a good idea. You will find details below.
Generally, we are witnessing another session in which the USD Index soars and gold is relatively strong - it moved to the declining support line which is just below $1,200 and it seems that this move is temporary. The cyclical turning point in the USD Index is still likely to cause a big decline in the US currency and we are likely to see a rally in the precious metals sector as a result. Other bullish points that we made earlier today also remain up-to-date. As always, we will keep you informed.
To summarize:
Trading capital (our opinion):
It seems that having speculative long positions is gold, silver and mining stocks is a good idea:
Gold: stop-loss: $1,172, initial target price: $1,249
Silver: stop-loss: $16.57, initial target price: $18.07
Mining stocks (price levels for the GDX ETF): stop-loss: $19.94, initial target price: $23.37
In case one wants to bet on higher junior mining stock ETFs, here are the stop-loss details and initial target prices:
GDXJ stop-loss: $28.40, initial target price: $37.14 (however, it might not be the best idea to open speculative positions in juniors at this time as they could move lower initially before they rally again - relative to the senior mining stocks)
JNUG stop-loss: $6.19, initial target price: $16.34 (as above, but it is even more discouraged in case of a leveraged junior ETF)
Long-term capital (our opinion): No positions
Insurance capital (our opinion): Full position
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief
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