$Copper Monthly

Copper is moving in the opposite direction of gold this week, much like the markets moved in the opposite direction from bullion during the Crimean repatriation.

We haven't heard much in the way of any discussion that ETFs with their illiquid nature may be driving declines in metals, or that their trust-like nature holds what may be in the cards for the markets.

That Mt. Gox went bankrupt is also a contributor to the rise in gold prices, but may also be a contributor to Copper declines. Virtual coin schemes may be no better than essentially illiquid or under capitalized exchange traded funds.

'The crash' may be hinted at by copper prices, where copper has achieved stable higher prices after a peak price, but may not see new lows as happened after the financial crisis. Markets may behave similarily, where a bear market may be in force, but average prices will generally be higher.

http://watch.bnn.ca/#clip1073684

http://watch.bnn.ca/#clip1073712

Copper, Silver, Gold all saw peaks in the same season, but Gold's chart is the only one technically situated in a rally mode.

http://scharts.co/1d1QlD7

http://scharts.co/1d1QPsJ

$Gold Weekly

A second massive financial derivative is probably being arranged, which corners the financial interest in bullion markets. The first volatility smile was very successful, but the second may see the data fighting quants' formlaic substances.

My guess is that GLD will go illiquid, meaning that the gold will be sold into the market, while the account becomes essentially a promisary note on the presumed gold the ETF may or may not be holding, much like any gold holding in the world. Substantive data may come out showing that the ETF can't hope to replace the gold sold, accumulated over years and sold in the space of a few months.

Strange to say, that gold mines present something similar, who have the gold in the ground, yet nobody believes that you have to actually mine the gold and refine it before selling it into the market.

http://scharts.co/1kClfB6

GBN.V Weekly

In the log scale weekly chart, a parabolic decline is easily discernible. I'm still curious to see just what the company will do when gold prices go beyond $1400/oz. U.S. $CAD gold prices are at $1535/oz. CAD, where the noted cost to mine was recorded in the first two profitable quarters was $674/oz.

Since all of the production was actually escrowed after commercial production was announced, you probably have 45k oz. per year for three years squirreled away. The company established commercial production, but did not establish cash flow.

If the requirement was to produce 100k oz. for a payment-in-kind mezzanine capital arrangement, the company could very well have produced this amount, only requiring 35koz. for the last three years to prepay the mining contractor.

This matches the liability column of the balance sheet.

http://scharts.co/10YifJC

-F6