$CDN Gold

When the gold price is underperforming at length, or giving no signal, you would want to have a serious look at the $CDN Gold price, and where its been, since all calculations for GBN.V are in $CDN.

Since oil prices have come off, the $CDN has come off, supporting the $CDN Gold price above $1600/oz..

There are an number of websites offering the $CDN Gold price such as Kitco.com or Bullion Vault.com.

Bear in mind that the $USD is losing status as a strong currency, since the banking sector in Wall St. is showing problems of the Lehman kind,(read: JP Morgan derivatives losses) thus gold will change the picture as a serious contender for the heavy weight bout, round 5. It had started as the underdog, making a comeback.

Somebody is laying on so much short sales in the gold markets during London hours that it appears they are betting the farm that a collapse is assured, if they don't help it along themselves. Perhaps they believe they're making headway, and somehow control the prices through their actions. It should be noted that even a $40 sell-off is not considered a major calamity any longer, and is not enough to dissuade the market.

Even Ross Clarke believes that gold prices will collapse to the 60-month EMA. He presents the mainstream view that gold is just a commodity and will price along with the commodities:

http://talkdigitalnetwork.com/2012/06/spain-gets-rescued/

A policy change that gold be considered a tier 1 asset in the midst of yet another Wall St. banking crisis will change that point of view. Any bank wanting to bolster their asset ratio can now use gold as a risk-free asset. Fraudulent banks dealing in paper with mathematics scribbled onto them will fail, and hard-working solvent banks that know they need risk free assets on the books will buy gold.

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$CDNX Monthly

The CDNX has broken below its neckline, which means very likely that the mining sector and junior mining stocks not in production will be an unmitigated disaster. What that might mean for GBN.V shares is open to question.

Note the almost perfect inverse correlation with the 30-year U.S. treasury bond. Likely new lows in yields are forthcoming, but black scholes options pricing models used in Delta Hedging strategies may have reached their peak ability to parry the money coming into mining stocks against the rising trend in treasuries.

There is basically no money coming into mining stocks, and treasuries are very near their peak value and can advance only very little.

A monthly close below the neckline seals the fate of this index. GBN.V has notably been closing below its own neckline.

How I read this chart is as follows: Mining stocks were all the rage leading up to the 2007 peak. After the financial collapse, investors chose metal over miner. But now, both metal and miner will sell off very abruptly. What will happen to gold is anybody's guess.

Oil as well as copper can be said to be in firmly bearish territory, while gold appears to be consolidating.

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$Gold/$Silver Weekly

One great similarity between 2008 and now is the bottom in GBN.V shares. The inverse correlation leading to the bottom in GBN.V shares in 2008 - 2009 and the inadvertent generation of a buy signal now are unmistakeable.

How I interpret this chart is that GBN.V rose with the gold price (and during a time treasury prices receded), rather than following the silver price. This is likely to occur again.

GBN.V News Release - Komis deposit

As for the GBN.V news release, its a pleasure to go through the drill locations and match them with the results. I find it astonishing that Waddly Lake Resources, and Placer Dome Development bashed their own heads against the wall over this deposit, spending millions and completely missed the rhyolite alterations, Northeast and Southwest.

All I can say is, wow. Of course, you have very complex ore geometry not in the traditional sense of veins in this fault zone, especially in with the rhyolite alterations, but the Komis deposit is probably a multiple depositional event with a multiplicity of geologies. Quartz veins/rhyolite/EP-type, all in the same fault zone location.

This warrants the attention of serious, bearded geologists the world over listening to their Strawbs albums.

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-F6