Smashdowns are seen as weakness of the precious metals bears


10:41a ET Monday, May 16, 2011

Dear Friend of GATA and Gold (and Silver):

Writing at GoldMoney, economist and former banker Alasdair Macleod, who will speak at GATA's Gold Rush 2011 conference in London in August (, remarks on "a big change in pricing dynamics for gold and silver" that many people have missed:

"The underlying reason behind the takedown in gold and silver is that the commercial shorts know the fundamentals have turned against them, and they also know that they have been wrong-footed. They are not blind to a further extension of zero interest rates and the inflation risk from that. Nor are they blind to the turnaround in central bank demand for gold. Nor are they blind to rising demand for gold and silver from the newly affluent in Asia."

Macleod's commentary is headlined "Commodities and a Stalling Economy" and you can find it at GoldMoney here:

Sounding similar notes is the London trading source at King World News, who says:

"If you look at what happened to gold on Friday, when did the smash occur? After the fix, after London had gone home, suddenly 35,000 contracts came out on the sell side. The Chinese and the rest of Asia along with London had gone home and paper was used to drive the price down. Some are beginning to believe this is a sign of weakness on the part of the bears. At these prices we are seeing serious buying out of Asia and the buying is consistent. Whether or not we have seen the bottom as of yet, large physical buyers are now buying the dips aggressively."

The London trader's comments are headlined "Massive Asian Buying of Physical Gold and Silver" and you can find them at the King World News blog here:

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


Wall Street Journal Publishes Lewis Lehrman's Call for the Gold Standard

In its April 26 edition The Wall Street Journal published an important essay by the Lehrman Institute's chairman, Lewis E. Lehrman, explaining why a gold-convertible dollar is critical to eliminating the shocking federal deficit.

"Experience and the operations of the Federal Reserve System compel me to predict that U.S. Rep. Paul Ryan's heroic efforts to balance the budget by 2015 without raising taxes will not end in success -- even with a Republican majority in both Houses and a Republican president in 2012. ...

"What persistent debtor could resist permanent credit financing? For a government, an individual, or an enterprise, 'a deficit without tears' leads to the corrupt euphoria of limitless spending. For example, with new credit the Fed will have bought $600 billion of U.S. Treasuries between November 2010 and June 2011, a rate of purchase that approximates the annualized budget deficit. Commodity, equity, and emerging-market inflation are only a few of the volatile consequences of this Fed credit policy."

To read more, and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit:

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Vancouver Convention Centre East
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Savoy Hotel, London, England

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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: