Everyone Agrees It’s a Crisis. Gold Still Declines.

The UN Secretary-General is warning of a global food emergency. The
German Chancellor says America has “no strategy.”

Russia’s president pledged to “do everything” that serves Iran’s
interests. Hezbollah’s leader called peace talks a “grave sin.” The
US rejected Iran’s proposal. Iran rejected America’s demands. Qatar
is warning of a “frozen conflict.” A US destroyer blocked an Iranian
tanker today.

And yet – gold is down. Silver and mining stocks are down even more.

This tells us something – that the precious metals sector
“wants” to decline – probably significantly so
– before turning back up.

Gold price decline accelerated, and it just reached its 38.2%
Fibonacci retracement. Even if this causes a rebound, it’s
unlikely to be significant.

Why?

Because the rally in the USD Index that triggered this 2%+ decline
was very small.

The USDX is up by a mere 0.21% at the moment of writing these words.

If such a tiny move up in the USD managed to trigger such a big move
lower in gold (about 10x bigger), then how far can gold slide when the USD
Index finally soars in a meaningful way?

Really far.

Meanwhile, the decline in mining stocks continues – in perfect
tune with my expectations and to my subscribers’ benefit.

The GDXJ is down over 4% so far today, and if the pace of this
decline is going to be similar to the pace at which it declined in
March, then it seems that the decline is about to accelerate.

It could be the case that we’ll see GDXJ close to its March
lows in 2-5 trading days.

Copper is also down today, and while it hasn’t plunged yet,
it’s clear that it once again invalidated its move above the
61.8% Fibonacci retracement and above a few of this year’s highs.

This is bearish, especially since the FCX – one of the key
copper stocks – is already moving lower.

FCX recently released a terrible earnings report, but its weakness
extends way beyond the initial reaction. In other words, it looks
like it’s ready to fall much more in the following weeks.

And it all continues to support the case for lower precious
metals and mining stock prices in the following months and –
likely – weeks.

Thank you for reading today’s article – the free version of
today’s Gold Trading Alert (in which the analysis continues).
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Thank you.

Sincerely,

Przemyslaw K. Radomski, CFA