Earlier we noted a worrisome sign for bulls: On-net, all speculation is on the long side. There are virtually no portfolio managers willing to go against gold.

Here’s another bad sign according to RBC (via FT Alphaville and Pragcap). Speculative positions on COMEX are spiking, while gold under ETF management is flat.

The weak physical demand for gold combined with the rapid rise in the speculative activity could give rise to a sharp correction, especially if the US dollar rallies.

It is becoming clearer that higher gold prices are tracking prospects for further devaluation of the U.S. Dollar. This is a result of the falling relevance and global stature of the U.S. economy, military and political cohesiveness. The stability of gold as a currency provides one of the best and most immediate polls on the direction of a nation’s future.

Gold has broken away from the seasonal pattern of flat to declining prices over the summer in each of the last seven years. This may have been a good indication that monetary easing in 2008 was beginning to circulate through the economy, increasing liquidity and the money supply. This presumed increase in liquidity could have been a reason for increases in the price of gold and the Dow. Not surprisingly, the rate of money circulation is anemic, as evidenced by low demand and supply of credit. It appears that liquidity may not be finding its way into either reported inflation indices or growth in gross domestic product (GDP). Without signs of reported inflation or credible signs of a return to a robust economy, the Federal Reserve has little impetus to increase interest rates, making the U.S. dollar less attractive. The gold price and the level for the Dow have achieved higher valuations even as the U.S. dollar depreciates relative to those assets.

The perspective that higher gold prices are not due to either inflation or lack of economic growth in the U.S. does not mean that inflation is not in our future. Simply from a U.S. perspective, gold did not become more valuable, but rather, the U.S. dollar lost value. Considering the United States lack of manufacturing and dependence on imports, higher inflation in the U.S. appears certain. Internationally, very real concerns exist over the U.S. deficit and its level of debt to GDP. While interesting today for traders and speculators, these trends may have very real implications for the economy and future of the U.S. On the present course, even at historic highs, hedging against inflation or further devaluations of the U.S. dollar with gold and gold equities appears to be a reasonable strategy.

So long-term U.S. dollar devaluation is Good for Gold.

According to the National Gold Group at the ongoing China Mining Conference, China has recently increased gold quota in its foreign exchange reserves from 600 tons to 1,054 tons.

China produced 282 tons of gold in 2008, the biggest amount in the world even surpassing South Africa.

Meanwhile, the country has discovered new gold deposits of 750 tons.

In 2008, total gold demand in China reached 395 tons, and total sales value of gold and diamond jewelry reached 180 billion yuan, ranking second in the world after India.

It is reported from JOHANNESBURG, October 21 that Gold Fields Limited (Gold Fields)  is pleased to announce that is has become the first mining group, registered as a signatory with the ICMI (International Cyanide Management Institute), to obtain accreditation for all its eligible operations with the International Cyanide Management Code (Cyanide Code).

The ICMI is established under the auspices of the United Nations’ Environment Programme & International Council on Metals and the Environment. The ICMI administers the International Cyanide Management Code of Practice to which signatories adhere, to manage cyanide responsibly.

This follows full accreditation being achieved at Kloof mine and Driefontein mine, both located in South Africa.

Gold Fields’ Chief Executive Officer, Nick Holland, commented: “The Kloof and Driefontein achievements follow equally impressive accomplishments at Beatrix mine, which is also in South Africa and which achieved its full accreditation in February 2009, Tarkwa and Damang mines in Ghana that achieved full accreditation in June and May 2008, respectively, and the new South African mine, South Deep, which achieved full accreditation in December 2008. Cerro Corona mine in Peru does not require accreditation as it does not use large amounts of cyanide in its processes. The Agnew mine in Australia achieved substantial accreditation in June 2009 and is expected to achieve full accreditation in December 2009. This means that all of the eligible Gold Fields mines are now accredited and seven of the eight have achieved full compliance. We have now achieved the objective we set ourselves in November 2005, when we became a signatory to the ICMI Cyanide Code, for all Gold Fields operations to be ICMI accredited”.

The president of the ICMI, Paul Bateman, congratulated Gold Fields on being, “….the first mining group to obtain accreditation for all its signatory operations…”.

Gold Fields’ support of the ICMI is consistent with the principles and objectives of the Group’s Sustainable Development Framework, which addresses every aspect of sustainability in the organization, including the use of cyanide in the production of gold.

The Cyanide Code is recognized as best practice for cyanide management in the gold mining industry by the World Gold Council (WGC) and the Council for Responsible Jewellery Practice (RJC). The ICMI accreditation process adheres to the principles of the International Council on Mining and Metals’ Sustainable Development Framework to which Gold Fields is fully committed. The International Finance Corporation (IFC) and the G8 Group of Nations also acknowledged it as the best practice guide for responsible cyanide management.

It is reported from DETROIT on Oct. 21 that through the collaborative efforts of the North American steel industry and automotive manufacturers, significant advancements are being made in fuel economy and vehicle emissions performance, according to Ron Krupitzer, vice president of automotive applications for AISI’s Steel Market Development Institute (SMDI). Krupitzer and Jody Shaw, manager of technical marketing and product research for U. S. Steel, addressed the Environmental Protection Agency and the National Highway Traffic Safety Administration (NHTSA) at a hearing today on a proposed rulemaking held in Romulus, Mich.

The proposed rulemaking addresses light-duty vehicle greenhouse gas emission standards and the Corporate Average Fuel Economy (CAFE) standard, which are consistent with the National Fuel Efficiency Policy announced by President Obama in May 2009 to address global climate change and fuel consumption.

According to Shaw, steel plays an important role in reducing the energy consumption and CO(2) emissions across all phases of the vehicle’s life, including manufacturing, driving and end of life. When all of these phases are considered, the result can be lower life cycle emissions for AHSS compared to other materials such as aluminum or magnesium.

“In order to comply with the tailpipe-only regulations, automakers may inadvertently select materials that increase the life cycle carbon footprint of the vehicle,” Shaw said. “While other materials may provide mass advantages in vehicles, the resulting improvement in fuel economy may not offset the energy use and CO(2) emissions that result from manufacturing and recycling of a vehicle containing the replacement materials. To address these unintended consequences, a Life Cycle Assessment (LCA) approach is needed.” The LCA approach assists automakers in evaluating and reducing the total energy consumed and the lifetime greenhouse gas emissions of their products.

Krupitzer also discussed the significant accomplishments being made through collaborative efforts with automakers and the North American steel industry to improve vehicle safety and reduce mass. Through the work of car company and steel company engineers, AHSS grades have become the fastest growing material in new vehicles, rising to nearly 15 percent of all steel in new vehicles today.

Both Krupitzer and Shaw praised the work of the North American steel industry in reducing its carbon footprint by improvements in steelmaking. “Since 1990, the North American steel industry has reduced the energy and carbon intensity of steel by 33 percent,” Krupitzer said.

AISI serves as the voice of the North American steel industry in the public policy arena and through its business unit, SMDI, conducts research with its member companies in partnership with its customers to advance the use of steel in the marketplace.

Life Cycle Assessment approach comprehensively evaluates material selection decisions and their effect on greenhouse gas emissions.

It is reported VANCOUVER on Oct.21 that from Prophecy Resource Corp. has entered into an Option Agreement with Victory Nickel Inc. whereby Prophecy has the right to acquire a 100% interest in the Lynn Lake Nickel-Copper Project located in Manitoba, Canada.

The Lynn Lake Project is located in the historic mining town of Lynn Lake in northern Manitoba, about 320 kilometres by road access northwest of the Thompson mining camp. The property is the former Sherritt Gordon Mines Limited mine site known as the Lynn Lake A mine and Farley mine, comprised of 30 mineral leases covering an area of 590 hectares. The property was operated by Sherritt Gordon from 1953 to 1976 for a total of 24 years, with reported production of 22.2 million tons at an average grade of 1.023% nickel and 0.535% copper.

Under the agreement, Prophecy shall have the right to acquire a 100% interest in the Lynn Lake project by paying Victory an aggregate of $4,000,000 over a four year period and incurring an aggregate of $3,000,000 in Exploration Expenditures over a three year period.

As part of the agreement, Prophecy will also issue to Victory 10% of Prophecy’s outstanding shares, post financing, and grant Victory the right to participate in future equity financings on a pro rata basis so that Victory may maintain its 10% interest in Prophecy.

In order to fund the initial property payment to Victory, Prophecy has agreed to a non-brokered private placement of 7,000,000 units at a price of $0.05 per unit for gross proceeds of $350,000. Each unit will be comprised of one common share and one-half of one share purchase warrant, with each warrant entitling the holder to purchase an additional share at an exercise price of $0.10 per share for a period of two years from the date of issue.

The foregoing transactions are subject to acceptance for filing by the TSX Venture Exchange.

Prophecy also wishes to announce the appointment of Mr. John Lee, CFA, as a Director of the Company, effective immediately.

Zijin Mining (2899.HK: Quote) (601899.SS: Quote), China’s largest listed gold company, missed outbound investment opportunities because of inaccurate judgements, a senior executive said on Wednesday.

“In terms of overseas investment, there were inaccurate judgements of the mining market. Even though we’ve done a lot of work the achievement is not satisfactory,” Zijin’s chief executive Chen Jinghe told an industry forum in China’s port city of Tianjin.

“We’ve got some projects that are not large-there is a difference from our expectations,” he said.

Gold XAU= hit a record of above $1,070 last week on a weak U.S. dollar as the precious metal is often seen as a hedge against the dollar. It has risen more than 20% this year.

Chen said the company barely missed some very big projects.

Zijin said in July that it had terminated share acquisition talks with a Kazakhstan gold company, but gave no reason for the termination.

It was in active pursuit of overseas resources and had made initial investigations into various overseas projects, although no agreements had been signed, the company said in a statement in July.