Gold Monthly

Since the monthly close will be on us as of the close, it would be worthwhile to look at the monthly gold price chart.

Since proposing that the gold bull market is a Wave-one extension, and that we have seen the correction of wave '4' in the sequence, gold price moves are falling place according to the paradigm.

Most people are expecting that the gold price is a reflection of a volatile commodity subject to the whims of inflation. But in the correction a bear market has not yet started, and expectations of inflation are suddenly changed to deflation.

The real expectation should be that gold prices will complete the elliot wave count of a one-wave extension and conform with all of the observed parameters. Setting aside any economic theories which are calling for absolute collapse, the market is setting the price.

We had a catastrophic dishoarding in a panic, followed by short covering and a paper chase against rising gold prices, leaving us where we are now. All within a corrective norm for a Wave-one extension which which says that wave '4' rarely surpasses the .618 retracement.

Over the long term of the gold bull market, gold prices despite the presumed volatility of the metal price (which is an inert substance and will not change for millenia once refined) the wave '4' correction has conformed with remaining above the .618 correction from the high.

Setting aside economic debates, you can look at the gold price from a technical and charting perspective:

http://crudeoiltrader.blogspot.ca/2013/05/precious-metals-miners-start-bottoming.html

http://scharts.co/18SFo10

GBN.V Weekly

We had a new low this week in GBN.V share prices, as was predicted by the sell-side broker that wanted to inform everyone holding shares that they were bag holders.

What that means is that he believes GBN.V management to be swindlers and crooks, meaningfully profitting at the expense of everyone else, selling them worthless shares.

The only people presumed to be profitting in a small way is the sell-side.

A new wrinkle this week was that regulators allowed a massive over-allotment in the bid to presist at length for the trading day on Thursday.

The stong inverse correlation with the gold/silver ratio appears due to bottom, setting up yet another technical buy point.

http://scharts.co/161osFJ

$USB Monthly

USB monthly should be selling off, since the technicals continue to deteriorate. As a proxy for bonds everywhere, it has been at times strongly inversely correlation with GBN.V shares, so if the bond market sells off, GBN.V shares aught to rise.

Regulatory changes allow you to sell the miner and buy the bonds as long as you hedge selling of shares you do not own into the market.

GBN.V has a large negative carry, equal to almost all of the publicly held float, requriing a buy-in, but this would also required pronounced weakness in the bond markets.

http://scharts.co/14IaQML

-F6