Tensions between Russia, and the West continue to push precious metals higher.  Gold climbed back above the critical $1200 mark.  Once again the Greek debacle is coming back to haunt markets as investors fear another decline in the Euro.  The Dow was down over 300 points yesterday as investors are beginning to brace for uncertainty from a declining oil price pushed down to punish Putin and his friends.

As expected the end of tax loss selling should support a rally in the beaten down junior miners.  We could witness a powerful January Effect where the small caps outperform.  A break above $1240 in gold could really ignite renewed buying across the sector.

Investors should specifically watch out for breaks of critical moving averages such as the fifty day moving average (50 DMA).  A break above the line indicates a potential change in trend.  The junior gold miners (GDXJ) have broken above the 50 DMA for the first time in four months.  This means the probability of a change of trend has increased.  Confirmation of a major bottom would be a break of November highs at $30.

Now until at least March when PDAC begins in Toronto is a very favorable season to watch the junior mining stocks.