I tried to get across the message yesterday that we needn’t sit on our thumbs while waiting for the precious metals sector to come alive. Like many of you, I hold some mining stocks that I’d rather not think about at the moment, DROOY, Endeavour and Pacific Rim among them. But there are also some solid winners like Cepheid, and oversold bargains like Aquila, that have more than compensated. The bullion stocks will have their day, I’m quite sure, but if that day doesn’t come soon, I’d rather not be in the position of having to hope for better. In the investment world, hope is the last refuge of the loser. Better to act than to hope, and to steer your capital toward the best possible returns rather than remain frozen at the wheel.

I don’t mean to suggest that the picture for bullion is grim. Far from it. But it’s impossible to ponder the chart below without concluding that neither are prospects particularly sunny at the moment. Yesterday’s $5+ drop affirmed that there is insufficient interest to create bullish impulse legs even on the hourly chart. The March contract came within less than a dollar of doing so on Monday, yet it couldn’t muster that final push that would have turned the short-term trend bullish. Now, depending on which of two minor peaks we use as point ‘A’, the futures could fall to either 416.30 or 407.80. We’ll know soon enough, but regardless, there’s no point in remaining paralyzed until we are proven right or wrong.

(Click on image to enlarge)