The Gold Price Floor - $1600/oz.

This was a test of the emergency naked shorting system. We will now go back to our regular programming.

Post hoc ergo propter hoc, how commodities were selling off and that gold was a mere commodity was becoming tired by Friday. No mention was made of the surreptitous margin rate hikes at the CME and Shanghai exchanges.

One detail likely to be missed in this latest correction in the gold price, is the fact that lease rates remained negative in the short term, where normally a correction of this extent would require an aggressive rise in rates.

http://www.kitco.com/charts/popup/au0030lr.html

Very little in the way of actual physical gold was transacted. There's a buyer for each contract that was sold, so if a larger percentage stands for delivery in October than normally do after a sell off post-expiry, that means every contract sold backed by promises will have to be bought back in haste. Trouble is, there hasn't been any significant increase in the amount of available gold.

What looks like an ill-timed intervention in the gold price in the midst of a gold bull market may actually be an indicator of how much leverage is being applied. Volume remains strong.

supersize: http://www.flickr.com/photos/11747277@N07/6199754093/sizes/l/in/photostream/

stockcharts.com

Gold Is For The Fool

BNN.CA headlines: 'Gold Is For The Fool' then presents a CME trader who has obviously hit the sauce prior to the interview, who then reveals that profits can be made for the shrewd trader since options are pricing in gold up to ~$3000/oz. U.S. (probably celebrating buying gold in the overnight market for ridiculously low prices, or taking robust gains overnight.)

The announcers are clearly frustrated by the unexpected, since the idea was to trash gold as much as possible, but the truth be known, gold is going much higher. Any pretense of gold as a volatile commodity to be avoided is immediately discarded on news that a great deal of money is to be made on spread contracts.

http://watch.bnn.ca/#clip539362

http://www.reuters.com/article/2011/09/28/us-gold-etf-idUSTRE78Q6HH20110928

Dr. Faber

Dr. Faber calls for 1100 on the S&P, not $1100/oz. gold.

http://www.gurufocus.com/news/146590/marc-faber-thinks-gold-may-drop-to-1100

FT

Claims that investors are moving into the gold mining shares don't hold water, since the GDXJ has dropped off significantly.

I shudder to think that financial viziers have suddenly become engrossed in geology.

Right now, its all about having a drill interval 'wide-on' and ounces in the ground being sold to a much bigger company. No cogent economic model exists except the benefit of equity price appreciation. And this in the onset of a historically significant bear market.

Financial Times