Another billion dollar gold merger has just been announced. This time it is between Iamgold, which is buying Cambior for a 31% premium over its closing price from yesterday. The new Iamgold will be the tenth largest publicly traded gold producer with 1.1 million ounces of gold produced annually.

In August we saw the blockbuster purchase of Glamis by Goldcorp and now we are seeing another deal just a few weeks later. Expect to see even more mergers over the next year.

Gold is up $5 as I write this. It looks like we're going to get a bounce off of this recent low, but there is no sign that a real bottom has been put in. For that I neeed to see gold stocks outperform gold by holding up - or even going up - on a day in which gold is down. I think we'll see this happen towards the end of next week or the week after with gold retesting the lows of this week. I sold all of my gold positions, except the small cap gold stocks I own, so I'm sitting on a pile of cash now and am waiting for a real bottom. Will talk more in detail how I identify those this weekend.