$Gold Monthly

At the end of the month we essentially have a close below the .618 retracement level. There is one morning of trading left in the month, Friday, where gold prices would have to climb some $40 to get back above it. Still, if gold prices were to close where they are now for the month, then you have a mere 4% or less difference.

Despite the bearish appraisals for gold prices, much of the support for gold prices being negative real interest rates remains intact, and this week we have strong bids for treasury auctions, as the treasury market catches a bid.

A risk reversal aught to occur then, in bullion markets. There are other fundamentals that lend support, namely postive lease rates above the discount rate. There are also incredulous supply/demand statistics, where physical demand indicates hoarding. GLD is still in the precarious position of its shareholders taking delivery, while they are bound to buy back all the of gold they sold into the market.

The latest news that might lend support to gold prices is that the Chinese central bank has pumped so much liquidity into their banking sector, that they are quadruple western central bank efforts -combined.

From my point of view, I think the gold price fixing scandal is only just the banks vying for position between one another, and that price fixing is a matter of expedience. They owe one another ~50X the actual available physical demand, so price-fixing lower for the benefit of derivatives in the precious metals sector takes precedence. They owe each other in a precarious derivatives pyramid.

Options on derivatives contracts expire on the second to last tuesday of each month, two days prior to futures options expiry on the options calendar, and a week before precious metals options expiry, according to NYSE/Euronext.

Gold can't be conjured up out of derivatives on the Euronext, any more than you likely find a pay streak panning for gold. It comes out of mines developed by the mining sector, and this is where the producing asset is in gold.

Mark Bristow of Randgold:

Kitco Video

http://scharts.co/18SFo10

via CEO.ca - Gold Mania In The Yukon

As you will see, exploration upside has its grassroots beginnings, but the reality is in an operating mill, consolidation of claims, a preliminary economic analysis, a modification of the Metals, Mining, and Effluent Regulations by parliamentary committee for tailings disposal, and intensive de-risking of a prospect.

By any rights, GBN.V is what is referred to as: Sleeping Beauty.

Oh, beauty, eh?

http://www.nytimes.com/2011/05/15/magazine/mag-15Gold-t.html?pagewanted=all&_r=1&

GBN.V Monthly

In reviewing the lengthy period that an equity swap contract is in vogue over a stock like GBN.V, it would have had to have expired this month. As a corroboration of this fact, a 1.5m. share bid was kept in place for a couple of weeks.

But once nothing occurred, the bids were pulled after derivatives options expiry on the 19th.

We are into Q3, with no reporting on how Q2 production went. Considering the company track record on reporting to its shareholders, this comes as no surprise.

I expect the sandbagging of results to continue, though perhaps once we are past tax loss selling, there aught to be some changes.

http://scharts.co/163GcQG

http://www.caseyresearch.com/articles/the-greatest-opportunity-in-30-years

-F6