Gold stocks seem to be pausing at this level. I would expect this week to be flat to down for gold stocks. You have to expect a pause at some point due to the huge run they've have since June. The stocks need to consolidate their gains before moving higher. It's hard to say exactly how long they'll pause. They could quickly dip a percent or two(support is now on the 150-day moving averages for the HUI and XAU) and then go screaming back up again or else just trade in an extremely narrow range for two to three weeks. Some sort of consolidation is only natural though and the overall big picture remains bullish.

In fact I'd like to add to my positions at the end of the consolidation period. A lot of you just froze up and sat on the sidelines after the June bottom. By waiting for this consolidation to play out you'll be able to make a safe entry point too.

There have been some interesting news with some of the gold stocks I follow over the past few weeks. I talked about what is going on with Battle Mountain Gold and Eaglecrest last week. I need to keep you up to date with the developments involving Paramount Gold(OTC: PGDP). I haven't talked about it much, because over the past month I have been so focused on following the action in the gold market.

In May Paramount signed an agreement with Teck Cominco to create an "Andean Gold Alliance" consisting of 21 properties (10 in Argentina, 7 in Chile and 4 in Peru. The agreement, creates a strategic alliance between Paramount and Teck Cominco for gold exploration in these three countries. The alliance also provides for a mutual Right of First Offer with respect to the divestiture of new and existing gold exploration properties over significant parts of Argentina, Chile and Peru.

Commenting on the Alliance, Alain Vachon, Paramount's Manager of Exploration, South America stated, "I am very excited to be heading up exploration on such a high quality property portfolio. Over the last three years, Teck Cominco has staked more than 100 targets using the latest technical exploration tools. In particular, Teck Cominco is one of the larger mineral claim owners in Argentina with more than 500,000 hectares and I believe that Argentina is the most under-explored country in South America." The newest member of the Paramount team, geologist Mark Slauenwhite, formerly with Barrick Gold, will be working directly with Alain Vachon on the AGA.

Teck Cominco also agreed to participate in a private placement financing in Paramount by way of the purchase of 117,750 units at a price of $4.25 each for a total value of approximately US$500,000, where each unit shall include one common share and one 2 year stock purchase warrant exercisable at $5.00.

On June 28 Paramount announced that "based on data provided by Teck Cominco Limited, as well as field visits to Chile and Argentina, the Paramount team in South America have identified 5 high priority properties of which 3 are in Argentina and 2 are in Chile. "

Alain Vachon, General Manager for Paramount in South America commented "Teck Cominco Limited is a top-tier major mining company and we feel very fortunate to be their strategic partner for gold exploration in South America. We have acquired a very good portfolio of properties with significant upside potential and are confident that one of them will become a major discovery. Our plan is to aggressively work the 5 high priority properties we have identified over the next 12 months with the objective of proving up a geological resource. We have a team of geologists with the expertise to face such a challenge and this will be the key to our success."

Back in May newsletter writer Ron Struther's visited Paramount's San Miguel project in Mexico. He wrote a full report with photographs that you can access here:

http://www.playstocks.net/RTRV127.1MexicoJun2006.asp

Paramount has done a lot since I first recommended it a year ago. Its gone from just one property and a geologist to a whole team of geologists and an alliance with one of the largest mining companies in the world. It's one of the most exciting exploration companies in the Americas.

This week I plan on doing an analysis of the energy sector and another sector not on anyone's radar that appears to be starting a stage one bottom.