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In The Two Best Gold Investments In The World Right Now, Steve explains why gold is one investment that investors may soon be willing to pay almost any price to get… and how two gold investments in particular could easily double or triple in price over the next few years.

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Gold moved above $705 in after hours access trade yesterday and traded in a range of about $705 to $712 in Asia and London.  It then sprinted up over $725 in early New York trade, fell back near $715, returned to $725, and then fell off slightly into the close, but it still ended with a 2.33% gain at a new 25 year high.  Silver traded mostly slightly higher in Asia and London before it rocketed above $15 in early New York trade and then seesawed with gold into the close, ending with a 4.33% gain at a new 25 year high of its own.  However, at the time of writing both metals are off about 1% from their close.

Euro gold rose to new all-time highs above €555, platinum gained $39 to $1,288 to new all-time highs, palladium gained $10 to $394 to new 4 year highs, and copper exploded nearly 20 cents higher to new all-time highs above $3.90.

Gold and silver equities fell from all-time highs despite the spectacular gains in the metals.  After finding about 1% gains in morning trade, all three indices fell with the major indices and ended about 2% lower on the day.

From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com:

He is talking about Tuesday’s $22.30 up day…

“And on a day like that the gold OI falls more than 5,000 contracts. It PROVES how right GATA is, and has been … and it demonstrates how the major factor in this gold rally is the pathetic Gold Cartel trying to cover their butts, along with the other major shorts.

Again, what we have here is unprecedented in US financial market history: a market with a 1500+ tonne annual supply/demand deficit, falling mine production, and a Cartel (and sycophants) trying to cover thousands of tonnes of short positions, while demand for gold is surging.”

From The Hightower Report, Futures Analysis and Forecasting:

“Just when it seemed that the market was going to slow its rate of gain, gold managed a massive upward thrust and managed to hold a large portion of the gains. The trade is beginning to talk up the prospect of inflation and while many might suggest that inflation has been playing for a long time in this market, it should be noted that the US Fed still hasn't accepted the idea that inflation is an issue or that high oil prices are causing a pass through effect. We also think that persistent declines in the US Dollar are serving to ramp up flight to quality purchasing of gold and certainly the idea that China is in the hunt for a host of commodities continued to play loudly in the marketplace.

With the copper market simply stratospheric in its gains early Thursday, it was clear that silver was beginning to look attractive in relation to a host of metals markets. In fact, the sharp gains in copper and the early run up in energy prices seemed to lay an impressive inflationary environment out for silver and that finally inspired buyers to move into silver at a more aggressive pace. Some players have even suggested that the Fed failed to send a message that they were willing to fight inflation and that supposedly inspired some buyers of silver today. In the end, flight to quality buying and investment demand continue to coexist together.”

A few insightful thoughts from reader Todd K.:

“It is interesting to see all the speculation on the E-wave counts - the one aspect no one seems to look at is that a Super Cycle Wave 1 happened in January of 1980,  That would make the Super Cycle Wave 2 bottom the October 2000 bottom (a 20 year cycle and 76% retracement.) That would put us at the beginning of Cycle wave 3 of 5 in wave 3 of 5 in Super Cycle Wave 3.

Because wave 3 can never be the shortest wave and generally is the wave that extends it may last for years.  We have 3 up Cycle waves which are made of 5 waves each which are also made of 5 waves each and so on and so on ....  At the completion of Super Cycle wave 3 we will go into a correction Super Cycle wave 4, if Super Cycle wave 1 was indeed the January 1980 high, the bottom of wave 4 can not extend below the top of Super Cycle Wave 1. 

Bottom Line - we have a long way to go to the top of Super Cycle wave 3 for the retracement at 38.2%, 50%, or 61.8% not to drop below the January 1980 high of over $800.00.

All you have to do is look at a 200 or 300 year chart as if it were 3 years, cut through all the minor 100 to 200 point blips, think in centuries instead of years, decades instead of months, years instead of weeks and the size of Super Cycle wave 3 will really open your eyes.  That is right after you pick up your jaw from the floor.

If Elliott Waves scale down to minute waves they must also scale up to decade and century waves.

Just my thoughts on a bigger picture.

I think I know when we will see Super Cycle wave 4.

Either when world gold production exceeds demand or when the price is so high it curtails demand.  The price could be in hundreds of dollars per gram or maybe even per grain.

Per the Fortis Bank April Yellow Book the world was about 20,000,000 ounces short of demand going into 2006.  The growing middle class in India and China plus Middle Eastern buying and ETF's could easily grow demand by 2 to 3%, frenzied buying could take it to 5%. It is conceivable that the shortage could grow geometrically without a dramatic increase in world production. Then if China converts 1% of their 875,000,000,000 in foreign currency to gold at $875 per oz that is 10,000,000 ounces.  What % might they convert? 

In a world economy where U.S. dollars are being printed at an alarming rate there are just too many dollars chasing too little gold. Welcome to the world of geometric increases in the price of gold and home of the parabolic trend line.

I have to keep reminding myself that mining stocks are not gold.  Mining stocks can go into a wave 4 whenever the company or the company that bought the company decides to dilute shares with another issue of stock certificates to raise additional capital.  Long term it might be the right thing to do but it sure doesn't help pay my bills.

Just another way to look at it.

Todd K.”

Oil rose on renewed geopolitical concerns in Nigeria and on signs of growing world demand.

The U.S. dollar index found gains early in the day on yesterday’s forex report from the treasury, but it soon fell off to new one year lows as this morning’s Retail Sales report reduced the likelihood for further interest rate hikes by the fed.  Surging commodity prices countered this interest rate view for other aspects of the market today, but dollar bears point out that any further hikes in the U.S. will likely not come as quick as in Europe and Asia.  Geopolitical worries, twin deficits, and world governments diversifying out of U.S. assets are also factors hurting the dollar lately.

Treasuries fell as the yield on the 10-year rose back to its highest since May 2002 on inflation worries that increase the possibility for further fed rate hikes.

The Dow, Nasdaq, and S&P fell throughout trade and ended near their lows with over 1% losses.  The cause cited for the selling today was inflation fears raised by surging commodity prices.  All three indices had their biggest one day losses since January.

Among the big names making news in the market today were Pfizer, AIG, News Corp., RIM, Arcelor and Mittal, Viacom, J.C. Penny, and Merrill Lynch.

GATA Posts:

After seven years, Wall Street Journal notices GATA

Russia's president wants oil, gas traded in rubles on a domestic exchange

Investor's Business Daily interviews silver market analyst Ted Butler

Massive reduction in gold hedging reported for first quarter of 2006

David Morgan: The silver ETF, past and future

China is supporting the gold market, at least with bullish talk

Metals trader seems to be begging central banks to smash gold again

Gold & Silver Stock News Update from GoldReview.com:

Earnings from Agnico-Eagle (AEM), Crystallex (KRY), Bema Gold (BGO), Nevsun Resources (NSU), Metallica (MRB), Taseko Mines (TGB), and Golden Star (GSS), IAMGOLD’s (IAG) assessment and update, U.S. Energy’s (USEG) drill program, Great Basin’s (GBN) feasibility study results, Aurizon’s (AZK) drilling, and Silver Standard’s (SSRI) $165.6 million public offering were among the big stories in the gold and silver mining industry making headlines today.

WINNERS

LOSERS

All of today's gold and silver stock news:

Wildcat Exploration Ltd. Announces Options Grant - More
- May 11, 2006 | Item | E-mail

Breakwater reports first quarter 2006 financial and operating results - More
- May 11, 2006 | Item | E-mail

IAMGOLD's Quimsacocha preliminary assessment and operations update - "2006 has already been a great year for IAMGOLD. Our operations have been performing well, the life at the Yatela Mine is extended and the results from the Quimsacocha preliminary assessment are very positive. The reduction in resources at Sadiola is disappointing, but will have no impact on the mine plan or the Deep Sulphides," commented Joe Conway, President and CEO, "IAMGOLD will continue to build value for shareholders through the development of our quality exploration portfolio and existing operations." More
- May 11, 2006 | Item | E-mail

Marathon Announces $5M Private Placement - More
- May 11, 2006 | Item | E-mail

Paramount Gold Closes $1 Million Financing at $4.25 per share - More
- May 11, 2006 | Item | E-mail

Global Copper Corp. Options San Jorge to Coro Mining - More
- May 11, 2006 | Item | E-mail

ECU Silver Mining Inc.: Press Release - More
- May 11, 2006 | Item | E-mail

Alexis Closes Successful Debenture Private Placement with Industrial Alliance - More
- May 11, 2006 | Item | E-mail

Grupo Mexico's San Martin mine to close in 2 weeks - "Copper miner Grupo Mexico said on Thursday it would close its strike-bound San Martin copper, zinc and silver mine within the next two weeks, but did not rule out restarting production in the future. In a statement, the company blamed the closure on the local government's failure to break a strike at the San Martin mine, which last year produced close to 8,000 tonnes of copper and 19,000 tonnes of zinc." More
- May 11, 2006 | Item | E-mail

Drilling commences on Puncopata and Agaton Prospects, Macusani Uranium Project, Southeastern Peru - More
- May 11, 2006 | Item | E-mail

Continental Closes Final Tranche of Private Placement Financings - More
- May 11, 2006 | Item | E-mail

African Gold Group, Inc: $1,000,000 Non-Brokered Private Placement - More
- May 11, 2006 | Item | E-mail

Aurelian Grants Options to Directors and Employees - More
- May 11, 2006 | Item | E-mail

Crystallex Reports First Quarter Results - "The Company recorded a net loss of $7.0 million, or $0.03 per share for the first quarter of 2006, as compared with a net loss of $8.0 million, or $0.04 per share for the comparable period in 2005. The first quarter of 2006, as compared with the prior year period, reflects higher mine operating income due largely to realizing higher prices on gold sales, as well as lower charges for amortization and foreign exchange losses." More
- May 11, 2006 | Item | E-mail

Agnico-Eagle reports record quarterly earnings on record low costs and higher gold prices - "Agnico-Eagle Mines Limited today reported first quarter earnings of $37.2 million, or $0.35 per share. This compares to net earnings of $10.4 million, or $0.12 per share, in the first quarter of 2005. First quarter 2006 earnings included an after tax gain of $15.4 million, or $0.15 per share, from the sale of certain marketable securities. The quarterly earnings were negatively affected by a non-cash foreign exchange translation loss of $1.9 million, or $0.02 per share." More
- May 11, 2006 | Item | E-mail

Bema Gold Corporation: 2006 First Quarter Results - "Cash flow from operations, before changes in non-cash working capital, improved to $8 million during the period compared to use of cash of $5.8 million in the first quarter of 2005. The Company also reported significantly improved mine operating earnings of $6.3 million in the quarter compared to a mine operating loss of $9.3 million in the same period last year. The adjusted net loss for the quarter was $2.6 million ($0.01 per share) compared to an adjusted loss of $14.6 million in the same period last year ($0.04 per share)." More
- May 11, 2006 | Item | E-mail

Dajin Acquires Zinc Prospects - More
- May 11, 2006 | Item | E-mail

Freegold Golden Summit and Grew Creek Project Updates - More
- May 11, 2006 | Item | E-mail

Freewest Acquires George River Uranium Property in Northeastern Quebec - More
- May 11, 2006 | Item | E-mail

Initial Resource Estimate for AfriOre's Akanani Platinum Project Exceeds Initial Exploration Target - More
- May 11, 2006 | Item | E-mail

Franc-Or Announces Extension of Expiry Date on Newmont Subscription Receipts - More
- May 11, 2006 | Item | E-mail

International Gold Resources Opens Second Round of Private Placements - More
- May 11, 2006 | Item | E-mail

Anvil Mining Announces First Quarter 2006 Results - Record Net Earnings of $8.3 Million ($0.26 Per Share) - More
- May 11, 2006 | Item | E-mail

Yale Set to Start Reverse Circulation Drill Program at the Makuru Gold Property, Namibia - More
- May 11, 2006 | Item | E-mail

Atna Reports First Quarter Financials and Highlights - More
- May 11, 2006 | Item | E-mail

GlobeStar Completes Second Payment to Falconbridge for Cerro de Maimon Copper-Gold Project - More
- May 11, 2006 | Item | E-mail

U.S. Energy Corp. Announces Sutter Gold Diamond Drill Program - "U.S. Energy Corp. announced today that Sutter Gold Mining Inc. announced that it is moving forward with a combined underground and surface diamond drill program on its advanced stage gold project in the historic Mother Lode. The 18,000 foot drill program is scheduled to start in June." More
- May 11, 2006 | Item | E-mail

Starfield completes first closing ($14,261,652) of private placement - More
- May 11, 2006 | Item | E-mail

Apolo Commences Drilling on NUP - More
- May 11, 2006 | Item | E-mail

Breakwater Resources analyst conference call for the first quarter 2006 financial and operating results - More
- May 11, 2006 | Item | E-mail

Diadem to Commence Drill Program on Duquesne West Gold Project - More
- May 11, 2006 | Item | E-mail

Goldstake Doubles Depth Of High Grade Copper Zone - More
- May 11, 2006 | Item | E-mail

HE-5 Resources, Corp. Announces Forward Split of Company Stock - More
- May 11, 2006 | Item | E-mail

Nevsun Resources Ltd.: First Quarter Financial Results - "Nevsun's cash position at March 31, 2006 was approximately US$9.5 million. Subsequent to the quarter the Company announced a private placement of CDN$10 million which will also be added to the treasury for working capital purposes. The loss for the quarter was US$6 million as compared to US$3 million for Q1 2005; the increase as a result of implementing a new accounting standard related to mine stripping costs. This will be the last quarter of construction / commissioning prior to the transformation to a production company with cash flow from mining operations." More
- May 11, 2006 | Item | E-mail

Richmond Minerals Inc. & Fort Chimo Minerals Inc. announce joint venture agreement - More
- May 11, 2006 | Item | E-mail

Agnico-Eagle Completes First Phase of Drilling on Lincoln Gold's Buffalo Valley Property, Nevada - More
- May 11, 2006 | Item | E-mail

Three drill programs underway on Etruscan's extensive West African land package - More
- May 11, 2006 | Item | E-mail

QGX Receives Positive Metallurgical Results for Gold and Silver Contained in Oxide at the Central Valley Zone (CVZ), Golden Hills, Mongolia - More
- May 11, 2006 | Item | E-mail

Redcorp Ventures Ltd.: Wardrop Engineering Ltd. Engaged to Complete Feasibility Study for Tulsequah Project - More
- May 11, 2006 | Item | E-mail

Grandview Gold Signs Drilling Contract for Nevada - More
- May 11, 2006 | Item | E-mail

Eaglecrest Explorations Ltd.: Bolivian Minister of Mines and Metallurgy Provides Assurances - More
- May 11, 2006 | Item | E-mail

Young-Shannon Signs Letter of Intent to Sell 46.25% of Chester Gold Property to Private Company - More
- May 11, 2006 | Item | E-mail

Further Growth for Buffalo with Nickel Project Acquisition - More
- May 11, 2006 | Item | E-mail

Millstream's Koval Gold Property Program Update - More
- May 11, 2006 | Item | E-mail

Positive Results from Feasibility Study for Great Basin's Burnstone Gold Project, South Africa - "The Burnstone Gold Project is located in the South Rand area of the Witwatersrand Basin, 80 kilometers southeast of Johannesburg. The proposed mine site is situated in an area of open, rolling country, traversed by major paved highways, railroads, power lines and pipelines that provide excellent infrastructure for development. Skilled labour, mining expertise, equipment, process facilities and development capital are all at hand to support efficient development of the Project." More
- May 11, 2006 | Item | E-mail

Golden Goose Resources Inc.: More High Grade Gold Intersected at Magino Mine, Ontario - More
- May 11, 2006 | Item | E-mail

Metalline Mining Announces Sierra Mojada Plaza Rica Drill Results - More
- May 11, 2006 | Item | E-mail

First Quantum Reports Operational and Financial Results for Three Months Ended March 31, 2006 - More
- May 11, 2006 | Item | E-mail

Northland Resources Registers on the Norwegian OTC List - More
- May 11, 2006 | Item | E-mail

Aurizon Drilling of the East Mine Crown Pillar Extends the Mineralized Zone - "Aurizon Mines Ltd. is pleased to report that recent drilling at its 100 percent owned Casa Berardi Gold Project, located in north-western Quebec, has succeeded in extending the gold mineralization beyond the limits of the East Mine crown pillar." More
- May 11, 2006 | Item | E-mail

Metallica Resources Announces First Quarter Results - "The Company reported a loss of $0.37 million ($0.00 per share) for the three months ended March 31, 2006 as compared to a loss of $0.73 million ($0.01 per share) for the three months ended March 31, 2005. The decrease in net loss of $0.36 million principally results from unrealized losses on the Company's Canadian dollar cash balances due to a lesser weakening of the Canadian dollar relative to the U.S. dollar during the current period as compared to the preceding period." More
- May 11, 2006 | Item | E-mail

Drilling Underway at Coral's Robertson, Nevada USA Property - More
- May 11, 2006 | Item | E-mail

Metanor Confirms an Agreement for the Acquisition of Halo 50% Undivided Ownership Interest in the Bachelor Lake Property, Quebec - More
- May 11, 2006 | Item | E-mail

China Diamond Corp. Announces Further Changes to Board and Management Structure - More
- May 11, 2006 | Item | E-mail

Comaplex Minerals Corp. Announces Three Month 2006 Results - More
- May 11, 2006 | Item | E-mail

Taseko Reports Quarterly Operating Profit of $7.4 Million - "The Company had an operating profit of $7.4 million and earnings of $3.1 million for the second quarter, and earnings of $9.8 million for the six month period ending March 31, 2006. The following are the second quarter results of operations for the Gibraltar Mine:" More
- May 11, 2006 | Item | E-mail

European Goldfields: Sale of Olympias Concentrates - More
- May 11, 2006 | Item | E-mail

Houston Lake Signs 100% Option in Advanced Stage Gold Project - More
- May 11, 2006 | Item | E-mail

30,000 ft. drilling contract signed for Pony Creek/Elliot Dome properties, Carlin Trend, Nevada - More
- May 11, 2006 | Item | E-mail

Resource Finance & Investment Limited: Conditional Approval for Listing of Cadillac Mining Corporation - More
- May 11, 2006 | Item | E-mail

Silver Standard Announces US$165.6 Million Public Offering - "Silver Standard Resources Inc. reports that it has sold 7.2 million of its common shares at a price of US$23.00 (C$25.31) per common share to a syndicate of underwriters. Silver Standard expects to receive net proceeds of approximately US$155 million (C$171 million) after deducting underwriting fees and estimated offering expenses. Silver Standard has also granted the underwriters an option exercisable for a period of 30 days following the closing of the offering to purchase up to an additional 1.08 million of its common shares." More
- May 11, 2006 | Item | E-mail

Star Uranium Announces Exploration Update - More
- May 11, 2006 | Item | E-mail

Golden Star Reports First Quarter 2006 Results - "Golden Star recorded first quarter 2006 net income of $19.0 million or $0.092 per share as compared to a net loss of $(2.2) million or $(0.016) per share for the first quarter of 2005. The major factor contributing to the earnings in the first quarter of 2006 was the non-recurring $30.3 million pre-tax capital gain on the sale of shares of Moto Goldmines Limited." More
- May 11, 2006 | Item | E-mail

Consolidated Spire Ventures Announces Diamond Drilling has Commenced on the Prospect Valley Property - More
- May 11, 2006 | Item | E-mail

Belvedere Commences Drilling at their Osikonmaki gold deposit - More
- May 11, 2006 | Item | E-mail

Yani Roditis Appointed as Chief Operating Officer Gabriel Resources - More
- May 11, 2006 | Item | E-mail

Nevada Star Resource Corp. Announces Changes to Directors and Officers Following Annual General and Special Meeting - More
- May 11, 2006 | Item | E-mail

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- Written by Chris Mullen

Winners & Losers tracks NYSE and AMEX listed stocks that trade over $1.

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© Gold Seeker 2006

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