Precious Metals Market Timing - Update and Comments Ron Rosen May 18, 2005 1   2 The Euro has completed an apparent five (5) wave up move on December 30, 2004 at 136.78. It now most likely has embarked on its own three (3) wave corrective downward journey to a probable level of 116.06. EURO MONTHLY CHART THE 60 YEAR CYCLE IN BONDS There have been only 3 historic lows in price, highs in interest rates in the last 140 years. These occurred in 1864, 1920 and 1981.The time periods between these lows in price and highs in rates were 56 years and 61 years. This is considered the 60 year cycle. W.D.Gann considered the 60 year cycle the "great cycle." The last major low in interest rates occurred on January 26, 1946. This decline in rates, rise in price was taking place during World War 2 which endured one of the two greatest advances in commodity prices in the 20th century. According to the experts it did not make sense for interest rates to go down during a booming commodity bull market, but they did. Shades of "Yesteryear" we have been living thru a booming commodity market while long term treasury rates kept declining! According to the experts there is no explanation for long term treasury rates declining while commodities were booming. However now that commodities are selling off this must mean deflation is dead ahead, according to some long time experts, and that's why rates are going down. However if you look at the chart of the CRB index I provided you will notice that 30 years ago (yep the 30 year Gann Master cycle) the commodity index had a vicious correction right about the same time that we are experiencing one now. If you look at the Gold charts I have provided you will also notice that Gold topped 30 years ago (Jan 1, 1975) at around $205 first London fix and proceeded to drop to $103.50 an ounce. Gold recently topped in Dec 2004. Both the commodity index and the precious metals went on to new all time highs after the correction was over. Some commodities bottomed in the summer of 1975. Cotton was rising right thru the correction 30 years ago. As a matter of fact there was one heck of a bull market in cotton all thru 1975 and right into 1976. The cotton chart from 30 years ago and the current cotton chart are included at the end of this report. Cotton kept on going up right thru the overall correction 30 years ago. Is it possible for long term treasury interest rates to keep going down right into the year 2006, 60 years after they last bottomed.? I know of someone who believed this kind of thing happens. "That which hath been is now; and that which is to be hath already been; and God requireth that which is past." -Ecclesiastes You don't have to be religious to understand the significance of this statement. I do remember the year 1946; I was in High School at that time. Even with hormones raging I can recall many people saying that now that the war is over we are going right back into the great depression only now it will be worse. Something went awry with that prediction. Well here we are almost 60 years later and some folks are saying an economic disaster and deflation are right around the corner. Maybe they will be right this time but if we know what we are doing to a high degree of probability we can not only survive we can prosper. So that's the goal, whatever happens prosper. I will be doing my best to help one and all. Cotton was booming in 1975/1976. Check out the cotton and gold charts I have provided at the end of this report for cyclic action 30 years apart. Again "shades of yesteryear." 30 TREASURY BOND YIELD COTTON WEEKLY CHART 2005 COTTON WEEKLY CHART 1974/1976 GOLD WEEKLY CHART 2005 GOLD WEEKLY CHART 1975/1976 A subscription to Precious Metals Market Timing may be obtained at www.trade-delta.com or contact rrosen5@tampabay.rr.com Ode to the favored gold shares But remember this "They shall rise again." Have A Nice Day 'Help, help,' said a man. 'I'm drowning.' 'Hang on,' said a man from the shore. 'Help, help,' said the man. 'I'm not clowning.' 'Yes, I know, I heard you before. Be patient dear man who is drowning, You, see I've got a disease. I'm waiting for a Doctor J. Browning. So do be patient please.' 'How long,' said the man who was drowning. 'Will it take for the Doc to arrive? ' 'Not very long,' said the man with the disease. 'Till then try staying alive.' 'Very well,' said the man who was drowning. 'I'll try and stay afloat. By reciting the poems of Browning And other things he wrote.' 'Help, help,' said the man with the disease,'I suddenly feel quite ill.' 'Keep calm.' said the man who was drowning,' Breathe deeply and lie quite still.' 'Oh dear,' said the man with the awful disease. 'I think I'm going to die.' 'Farewell,' said the man who was drowning. Said the man with the disease,'goodbye.' So the man who was drowning, drownded And the man with the disease past away. But apart from that, And a fire in my flat, It's been a very nice day. POEM BY SPIKE MILLIGAN Ron Rosen email: rrosen5@tampabay.rr.com Subscriptions are available at: www.wilder-concepts.com/rosenletter.aspx Disclaimer: The contents of this letter represent the opinions of Ronald L. Rosen and Alistair Gilbert. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Ronald L. Rosen and Alistair Gilbert are not registered investment advisors. Information and analysis above are derived from sources and using methods believed to be reliable, but Ronald L. Rosen and Alistair Gilbert cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. The Delta Story Tee charts reproduced courtesy of The Delta Society International. 321gold Inc