Alasdair Macleod: Why technical analysis fails with gold

Section:

11:25a ET Tuesday, February 8, 2011

Dear Friend of GATA and Gold:

Technical analysis of the gold market is doubtful, economist and former banker Alasdair Macleod writes today, because analysts don't distinguish between investment in gold via paper markets and the hoarding of gold, the taking possession of the real stuff.

Macleod concludes: "Hoarders will be either right or wrong. It will go wrong for them if governments somehow manage to turn paper money into sound money without involving gold. Under any other circumstances the hoarders will eventually be right; and if they are right price becomes immaterial. As economic events progress and the weaknesses of paper money become more widely understood, signs of panic will develop. We will see serious attempts to use the paper market to force physical delivery -- not to ramp the price, but just to gain possession. We will see ETF holders switching from derivative-based ETFs into properly structured ETFs, fully backed with actual metal. We will even see redemption of metal-backed ETFs for the metal itself. We will see the bullion banks struggling to switch unallocated accounts into allocated, and we will see a desire to remove custody from the banking system entirely."

Macleod's commentary is headlined "Precious Metals and the Validity of Technical Analysis" and you can find it at his Internet site, Finance and Economics, here:

http://www.financeandeconomics.org/Articles%20archive/2011.02.08%20Metal...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



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Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit:

http://prophecyresource.com/news_2011_jan18.php



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Friday-Saturday, February 18-19, 2011
Glendale, Arizona

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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf