A lawyer working on behalf of physical commodity account holders at bankrupt broker-dealer MF Global Holdings Ltd. has worked out an agreement with a major gold futures merchant that will unfreeze their assets.

Physical commodity accounts holding gold had been frozen since that broker-dealer went bankrupt in late October, adversely affecting traders who had been unable to sell, trade or otherwise move on their assets as gold and silver prices saw significant volatility.

According to Trace Schmeltz, a partner at the law firm of Barnes & Thornburg, a deal was being worked out Friday with "a major FCM (futures commission merchant)," wherein the merchant would post collateral on physical gold positions, allowing customers with physical gold accounts to trade on or liquidate their assets. Schmeltz asked the merchant's name be withheld, citing the fact "their legal might not be done reviewing" specifics of the deal.

People liquidating their assets will have to accept a 28 percent reduction in the amount of assets, although Schmeltz clarified that percantage might go down if he was succesful in convincing the Court that "physicals ought to get treated as a class unto themselves." The haircut, as it is called, results from the fact that more than $1.2 billion dollars that should have been segregated in MF Global's customer accounts is missing, and bankruptcy court has not yet fully determined if shortfall will be shared equally among accountholders.

Previously, customer's gold assets had been frozen as a result of the proceedings undertaken by James Giddens, the court-appointed trustee for the liquidation of MF Global.

The unfreezing of physical assets is little solace to some market participants, who stand to lose money both from any haircut and as a result of having their assets frozen during a time of high volatility in the physical metals market.

Gerald Celente, a well-respected market forecaster who publishes The Trends Journal -- and who says he held a six-figure position in physical gold prior to the broker's collapse -- described the saga befalling physical gold traders like himself as "bulls--t."

"That this should have even been a question is an outrage," Celente told the International Business Times.

"That people had to hire a lawyer to get their gold back because some criminal group decided it wasn't theirs anymore -- you can only get away from this when you get to make the rules," he continued, adding that, as a trader "you're only as safe as the last loophole. You have no protection out there."

Celente was particularly aggrieved because, as he explained in a YouTube video shortly after the MF Global collapse, he had specifically requested delivery on his gold, rejecting the warehouse receipt most traders will usually accept.

"Now I know why you heard all those stories about people putting the money under the mattress for safety," Celente said "If you don't have it in your pocket, you don't own it."

Celente, like many customers who unexpectedly lost assets as a result of the MF Global debacle, is furious at what he sees as law-enforcement coddling of MF Global executives.

"When Corzine got called to testify, he got 'honorable' in front of his name. Honoroble, my a--," he said.

"I'll never trade again. I'm pulling my money out of everywhere."