The gold market quickly gave up the job-report rally. In looking at open interest over the last two days, I saw little evidence of short covering, so that fuel is still in place. GLD has clearly defined resistance at the $1,223 level, and the wall action there appeared purely technical. The support level where the gap up began is at $1,203.

It’s no secret for those of us invested in mid-tier producers and advanced-stage deposit that we need deals. Not dilutive deals but deals that at least nicely monetize assets. We know there are announced pools of capital burning a hole in the pocket.

A PwC survey predicts an increase in mining mergers and acquisitions this year as almost half of all mining CEOs (44%) said they plan to form a new alliance during the next 12 months. More than a quarter (28%) said sharing risks is one of the top reasons why they are open to deals.

The two largest, highest-grade deposits in the western hemisphere will likely be in the crosshairs for this. The first one, Pretium, is now permitted, and Continental is due to receive its final permits shortly. CNL is also due out with a new reserve and resource, and those will be even higher grade and larger. These are important de-risking hurdles. Both sell way too cheaply and thus are obvious targets. These will be larger transactions and should put catalyst money into the pockets of long-suffering investors.

The House of Tungsten (GLD) saw 4.18 tonnes jerked out Tuesday. Gold inventory rests at 733.06 tonnes.

On the Shanghai exchange we witnessed huge deliveries of 19.72 tonnes on Friday before the feeble jobs report. This was followed up Monday with a very solid 14.93 tonnes Tuesday and 14.10 Wednesday.

Here is your latest Gold Standard (GSV) Awde insider buying binge:

Collapsed bridge in China. Where was the galvanized steel?

“Mike” recently wrote in comments, “Rust: The longest war, glad to find a chapter extolling the incredible benefits of galvanizing with zinc.” This is quite true. I might add that during the running-amok, Chinese-construction boom they often cut corners on the use of galvanized steel. They will need to properly rebuild. Meanwhile, zinc inventories at the LME fell to 510,950 from 520,125.

Again a reminder that Chinese miners are at bubble valuations. They are running out of minable reserves, now estimated at about four years production.

Extractions from the House of Tungsten and other emptied western vaults worked for awhile, but other solutions are now required. I mentioned two prime situations above. There are more. The Chinese firms should use their inflated equities to swap for dirt cheap foreign gold and silver assets, and immediately.