The gold lever

An earlier blog stated that now would be the time to buy gold.It now seems that this was a little premature.It still does appear that several governments around the world have sold off gold reserves to pay off some of their debts.The size of the sell off was not expected at that time.In fact, there may be some of this still going on.However it appears as if the momentum has slowed down.A little relief may be expected by the first week of May.

Once the price of an ounce of gold hits 1450 an ounce or so the price of gold stocks should start to come back.Since the junior gold stocks fell more than senior producers they offer more of a lever to come back than the seniors do.A price of gold in the 1500 area would offer a quite good lever to the juniors.When does this blog see a price of 1500 an ounce?Likely before the dog days of summer.That is, before August.The seasonal demand for gold will likely be tepid in the hot summer days.