While we may be witnessing the beginnings of a bull market for commodities, the bear market for metals has not ended yet. The activity that has depressed the gold price over the last few years has to end and it will not end until the supply that has fueled it dries up. The market makers in this market have had it their own way for some time and they will not give up without a fight. How they will explain to the European Central Bank that a large percentage of their leased gold is not coming back will be interesting. This is more of a time to be looking ahead and steering clear of hedged producers.
Location is also important.
Alternatively buying physical metal at these price levels and taking delivery is still a good strategy. After all somebody has been buying the metal at these levels. Currencies need to be watched closely over the next few weeks as the Euro looks very sick, which won't help the Swiss. The Swiss still have about 120 tonnes of gold to sell, if they stick to their announced disposal program of 160 tonnes by September. Copyright by Professor von Braun.