Because of several bearish signals appearing recently in the precious metals charts, it was thought prudent to sell our long silver positions earlier today (see blog entry below). We did not sell our gold longs because there is still a good chance of a reversal and rally here in precious metals, but if both gold and silver were to break down now (the probability of this is increasing), we could potentially take a bigger loss with silver as it is more volatile and tends to fall faster than gold. The reason I'm being so cautious here (especially with silver) is that technical analysis indicates a potential steep fall in precious metal prices if those support levels around $1500 (gold) and $26 (silver) are clearly broken. If silver can push back up above $28, we will consider getting long again. We would also like to see gold above the $1600 level to negate our fear of a breakdown now. Despite the potential volatility in these metals right now, I should point out that the long-term and medium-term picture for gold and silver continues to look quite bullish, and should these metals break their current supports, we would still be looking for a bottom to buy. But for now we have watchful eyes on those supports at $1500 and $26.