GLD Weekly - Today's Action

Today's action in the bullion markets signals that bail-in procedures are being used to prevent bankruptcies in certain bullion banks. Just about everywhere that bullion is standing for delivery, the bail-in procedure is being used the de-risk technically bankrupt futures brokers, bullion banks, and leveraged traders.

Deposits held on account such as COMEX bullion are being sold, which means if you held bullion at the COMEX it will have been sold into the markets and you are being given cash in lieu of taking delivery.

There is no difference between MF Global going bankrupt and taking their client's money and bail-in procedures being used now, except you are having your bullion sold for you at the lowest price possible.

This probably affects ETFs which are showing record dishoarding.

Its the same story everywhere, physical bullion is being sold into the markets. Very highly likely the bail-in model is being used everywhere possible.

One of the rare occasions which you might say that owning a gold miner is preferable here, in the throes of a gold price correction.

And on a second take, the dishoarding that gold price pessimists were predicting to occur is occurring, the gold price will surprisingly find support. Why? Because bullion is essentially an illiquid market in terms of bullion, but awash in currency. Once bullion markets are made liquid in terms of bullion, they can absorb massive amounts of leverage.

The market will set the price.

One gold price forecast that is now defunct, is the hyperinflationary Sharelynx eWave, since gold prices went lower than the December 2011 low of ~$1523/US oz. This price projection has been disqualified. Where Sharelynx had predicted that the gold price correction would merely take one half the time of the previous price correction, the correction is now taking three times as long, though the elliot wave count doesn't change that much. That means prices in excess of $4000/oz. are way out to lunch.

The remaining price projection for gold in Euros that remains intact is the Dax In Gold.

http://scharts.co/Yvxbgj

GBN.V Reciprocal

One theory that hasn't necessarily been disproven is that GBN.V shares will be subject to a buy-in should long dated treasury bond prices decline. The TLT and 30-year US Treasury bond prices are showing lower lows and lower highs. Theoretically once treasury bond prices decline past their March 2012 levels, then the buy-in should begin.

In an hypothetical production scenario, 250tpd. @12g/t from Lloyd, 250tpd @12g/t from Heart, and 500tpd. @ 7g/t Komis produces 111,000 oz. per year.

@$1500/oz., today's gold spot price, the company can pay out a dividend of 20¢ per share per year after taxes with a cost of $674/oz.

There is a significant lag time between reported drastic production curtailments, actual production curtailments and quarterly reports attesting to the fact. There are no projected production plans being discussed at all.

http://scharts.co/ZRkUNV

-F6