Monthly Gold Chart

With our monthly gold chart, the two-year cycle in May sell-offs is occurring much ahead of time. The last sell off in the gold price was three months ahead of schedule, now we're seeing the same kind of sell off 7 months ahead of schedule.

So in the advance of the price of gold for the month of May, 2010, we are seeing a continuation of the bull market in what should be a seasonal corrective phase, occurring once every two years' time.

Price should continue to advance more precipitously due to a number of factors, and in approximately a year's time a new historical high in the price of gold. Possibly that would mean a completion of the '3' upwave in elliot wave terms, with prices reaching their long term inflation-adjusted average, or better(possibly 3 or 4 times the low of $681/oz.)

Very likely gold stocks will probably lag the overall bullion rise for the next few weeks:

supersize: http://www.flickr.com/photos/11747277@N07/4652532016/sizes/l/

stockcharts.com

golddrivers.com

Chartworks compares the long-term deflated gold price to come up with an analogy for the bull market with the previous dow jones long term bull market.

Chartworks.pdf

$IRX Weekly

The outlook for the monthly chart for the $IRX remains unchanged, but the weekly chart is showing an important decline to set in once the TRIX crosses over eventually, in the next few weeks' time. What the $IRX looks like is a settling out of short term rates very near the zero mark.

This is one of the factors causing net settlements in GBN.V shares for a very large naked short position, and as the $IRX declines, the presumably the volume of settlements will increase as naked shorters attempt to settle their overwhelming and volumnious obligations.

For just about every share sold into the market without owning any that are bought back day after day for the last few months, there is another naked shorter willing to jump into the position, leaving a very large obligation on the table which must eventually be bought back. The naked shorting in the stock is a leveraged position, which is directly affected by a decline in short term interest rates.

A decline in the discount rate is also putting upwards pressure on bullion markets. At the same time, GBN.V shares have not followed the decline in the markets, as would any equity:

Centerra Looking For Acquisitions

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By: Liezel Hill

28th May 2010

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TORONTO (miningweekly.com) – Toronto-based Centerra Gold is actively looking for potential acquisitions, and would like to acquire a development project to increase production beyond the existing expansion plans at the company's two mines, CEO Stephen Lang said on Thursday.

Centerra, which produces gold from the Kumtor mine in Kyrgyzstan and the Boroo operation in Mongolia, wants to boost output of the precious metal from the current 680 000 oz/y or so, to some 1,5-million ounces.

“I don't think that with the projects we have in front of us that acquiring a third one is a necessity. However, we see value in getting up to a critical size of a million-and-a-half, two-million ounces a year,” Lang said in an interview.

That kind of output growth will not be coming from any of the company's early-stage greenfield exploration in the next three or four years.

And so Lang is looking at taking on a later-stage exploration project or early stage development project, where Centerra can put its strong balance sheet to work to build another mine and fill the gap between the brownfield expansion projects already under way and longer-term exploration prospects.

The company plans to keep its focus in Asia, and central Asia in particular, he said.

The firm has no debt, and is pulling in increasing amounts of cash flow thanks to strong gold prices – the firm ended the first quarter with cash and short-term investments of $384,2-million.

This means it can move as fast as it wants on internal growth opportunities, while still keeping its options open when it comes to corporate activity.

http://www.miningweekly.com/article/centerra-scouting-for-next-project-to-build-2010-05-28

Edison Report (pdf) The Edison report is a file found on ResourceInvestor.com and mirrored, so that gold stock investors can better determine the fair value of their investment, without relying on wildly erroneous assessments on why one gold stock is valued less than another by taking an average of NAV of gold stocks across the market.

My question for the GBN.V management if they are fixing to sell their undervalued gold exploration interest to a larger competitor at a huge discount, then where on earth are they going to invest their money once they sell the company?

-F6