The precious metals sector has corrected this week's early gains. The USD Index is higher this week so all in all the sector is performing relatively well compared to the US currency. The latter hasn't declined so far, but it is likely to decline soon as it is right after its cyclical turning point (the dollar can reverse in the proximity of these points - it doesn't have to do so on a specific date).

The interesting thing about gold stocks is that the Gold Miners Bullish Percent Index just dropped below 5. The only 2 times that has been the case (ever - since this index' inception in 2008) were in early Nov 2008 and early Dec 2008 - after both parts of the major double-bottom pattern. Naturally, the implications are bullish as this is yet another signal that the sentiment is now extremely negative for the whole sector.

Full speculative long positions are suggested for gold, silver, and mining stocks.

Naturally, we suggest remaining in the precious metals market with your long-term investments.

As always, we'll keep you updated should our views on the market change. We will continue to send out Market Alerts on a daily basis (except when Premium Updates are posted) at least until the end of March, 2013 and we will send additional Market Alerts whenever appropriate. In other words, we have decided to keep you informed on a daily basis for another full month.

Naturally, we will provide a more detailed discussion of the above points in tomorrow's Premium Update.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA