It's looking like the precious metals have finally decided in what direction they want to move, and unfortunately it is down. We have been concerned about the possibility of gold breaking the $1500-1530 area and silver breaking the $26-27 zone. Today gold broke below $1500 and silver broke $26 (although both seem to be closing the day slightly above these numbers). The breaching of these support levels and the fact that momentum indicators are remaining bearish has increased the danger of a severe plunge in gold and silver prices and it is considered prudent to sell our long positions in gold now. Fortunately, we exited our silver longs last week, but anyone still holding long positions in silver would also be advised to exit now. There is a possibility that the strong drop today is being engineered by market manipulators to flush out investors just below the strong stop loss points mentioned above and that prices could quickly snap back above those levels over the next couple of days. However, the strongly bearish momentum signals now present in the gold and silver charts suggest that the danger of a significant plunge here is real, and we will want to see a bullish change in those signals before we can feel comfortable with long positions. As I've mentioned before, if prices plunge now it would likely be short-term, and we would be looking to buy the bottom as the mid-term and long-term picture for precious metals continues to be bullish.
There is no change to our positions in other markets today (broad stock market-out; crude oil-out; holding long positions in the Swiss Franc). I will comment more on these markets later today or over the weekend as I want to get this gold alert posted as soon as possible.