The summer doldrums arrived and the Hooray Henrys did their seasonal now almost tribalistic ‘sell and go away’ routine that is their tried and trusted routine each year. But just what if this year is different?

The HUI, which had fallen 50 points from 370 to 320, played its part in reassuring the sellers that spring is here so its time take a breather. Maybe they are right and they can come back in the fall to a platter of cheap gold stocks, we wish them luck.

So what’s the difference this year? Well gold itself is holding up very well at $676.90 and the gold stocks have, as evidenced by the HUI, bounced back some 20 points in 2 days. Now we all know that one swallow does not make a summer so what can we attribute this pleasant surprise too. Well the ECB has announced that its gold sales are over for this period of their agreement, which bodes well for gold. We take this news with a pinch of salt, as the players on the ECB are as about as trustworthy as a bunch of oil ministers ratifying oil production quotas. But, taken on face value it is good for gold. The second reason is the up coming Broadway production entitled “The Bounce” starring the US Dollar as the dead cat. Throw in a few nervous Finance Ministers heavily overloaded with paper reserves and gold along with gold stocks start to look attractive when compared to the vanishing wealth of their paper pile. It’s now a question of who will make for the exit door first an ignition that will then stampede the others (after all we are talking about followers and not leaders, as leaders are not attracted to a public service life style)

We have not sold any of our gold stocks as we took the view that we should ride out whatever summer selling came along and we are still of that view. The last few days as seen a reversal to the expected continuing down trend for gold and those who sold must now start looking for a re-entry point.