$Gold Monthly

In the linear scale monthly chart of gold prices in U.S. dollars, you have a bearish emerging broadening pattern with a brute short-covering rally. What this would suggest is that a breakout into new highs should occur in the intervening months.

A reliable two-year pattern, should it still be valid and not disqualified, means a new, historic high based on a calculable breakout from the broadening pattern should happen late in the month of May, with a modest interim correction in June.

http://scharts.co/TBNqVn

Related gold items this week:

Gold Eagle shows that a v-recovery of the gold price would mean that a bubble phase is now coming with a time scale of two years to complete.

The price blowout means that gold prices should conform with the elliot wave analysis, where the high price could either be a '5' wave the same size as the previous '3' wave, or in the same proportion as the '3' wave to the One Wave Extension. That would place the high in the ~$2600/oz. range. So what you're looking at is roughly a doubling of the price over the low, but could be as a high as almost three times the low if the '5' wave is the same size as the '3' wave.

http://www.gold-eagle.com/editorials_12/connor041613.html

Bloomberg fact-checked on physical demand:

Bloomberg News

Goldman wants you to believe that the gold price will take years to recover, because all commodities are in correction, but the announcer, Howie Wowie interprets that to mean that a recovery in gold prices will be quicker:

BNN.CA

Jim Grant commented during the correction:

http://bloom.bg/116nQKz

$Copper Weekly

The weekly copper price is showing a major breakdown of the chart of the type we've seen in gold mining shares. What we are entering into is a period of deflation, initiated by the brutal gold sell-off.

We have seen ourselves sidelined as gold mining investors in a massive inflationary rideout which started in 2002, and was repeated in 2008. Theories of deflation were supplanted by inflationist and monetary collapse paradigms.

The best place to be 'in' will be seen to be in gold mining shares, rather than bullion. This is because gold miners exposed to the commodity will see overwhelming free cash flow and growth, while copper miners will see their NPV seriously hampered for years. Many producing gold assets are actually copper mines, with gold by-product.

There is still the possibility that gold prices will see a fix in foreign exchange markets, and/or government intervention, meaning that holding bullion will not be as meaningful as holding a producing asset. A price fix in gold means that there is no longer any commodity price risk to mining production.

http://scharts.co/Z4NDVc

GBN.V vs. $Gold Monthly

The last thing you want to see as a gold mining investor is the kind of volatile, gold price risk as we had in the last week. Gold should be a hotly contested commodity with little fluctation in price and should be trading with within definitive parameters.

But the outlook since the correction is one of strongly volatile price risk, which comes out of futures markets operating as an adjunct to trading desks, much like GBN.V shares.

This should smooth out once treasuries are not seen to be a benefit any longer in trading futures as price become dully routine.

We will have to wait until June, to see any outward aspect in GBN.V shares, as treasury options close quarterly.

The irony is that GBN.V shares are at a low while stock market indeces are at historical highs. The contrarian trade is here, not in bullion.

http://scharts.co/YaQ57o

-F6