Gold declined yesterday, but the decline formed on relatively small volume - much smaller than the one that accompanied Tuesday's upswing. This means that the decline is likely a very short-term correction within a short-term rally.

The SLV ETF moved lower by 0.55% yesterday but it closed above the 50-day moving average, which suggests that the overall tendency remains bullish - for the short term that is. Silver moved back below its 50-day moving average, though, which is a bearish indication.

Palladium was slightly above the declining resistance line yesterday when we sent out the Market Alert and it declined without a breakout. This chart is still bearish.

The GDX ETF declined as well, but it didn't move back below the declining resistance/support line, which means that, at this time, it's just a verification of a breakout. This chart remains bullish.

As far as non-PM markets are concerned, it seems that the stock market will correct now (by the way, Paul indicated that stocks would fall yesterday in the pre-market Stock Trading Alert) and that the Euro Index will rally until it reaches its long-term resistance close to the 140 level. The Euro Index (which more or less trades in the opposite direction to the USD Index) seems likely to reach the 140 level after breaking above the previous 2013 high. Both markets provide bullish short-term (!) indications for the precious metals market.

Overall, it seems that the precious metals market will move higher on very short-term basis, before it declines once again.

We also still think that this is a good time (especially for risk-averse traders) to diversify one's trades into other sectors, for example into stocks and crude oil. At the same time we are keeping the special status of your account that allows you to purchase oil and stock analysis for a few dollars for the first 3 weeks.

To summarize:

Trading – PR: Half position: long position in gold, silver and mining stocks.

Long-term investments: A half position in gold, silver, platinum and mining stocks. As far as long-term mining stock selection is concerned, we suggest using our tools before making purchases: the Golden StockPicker and the Silver StockPicker

The stop-loss orders for the speculative long positions are:

• Gold: $1,280
• Silver: $21.30
• HUI: 220
• GDX: $24

Profit-take levels (it might be a good idea to close the above-mentioned position if the following levels are reached):

• Gold: $1,390
• Silver: $23.30
• HUI: 248
• GDX: $28

Note: At the moment of writing these words, gold is trading at $1,337.

As always, we'll keep you - our subscribers - 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 October, 2013 and we will send additional Market Alerts whenever appropriate.

As a reminder, Market Alerts are posted before or on each trading day (we usually post them before the opening bell, but we don't promise doing that each day). If there's anything urgent, we will send you an additional small alert before posting the main one.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA