I reached out to a few gold market observers today for their views of the recent dip in the price of gold. What do they think of gold's near $100/oz decline in the past month? Is it an opportunity to buy equities -- which have only dipped modestly so far?

Bob Moriarty (321Gold)

I’d like to see more of a downturn. Watch the COTs. We need the spec longs to throw in the towel.

Kerry Smith (Haywood Securities)

Gold is probably stuck in a range until we get past the Fed meeting. I think rates will remain low so that should be positive for gold. Buying the dips has been pretty successful lately. Gold is a bit below the 50-day though, so it could go a bit lower, for sure.

Mickey Fulp, Mercenary Geologist

Gold has been down on the idea that Old Yeller (Fed Chair Janet Yellen) will raise interest rates a quarter percent next month. So that anticipated move is becoming baked-in and that negatively affects gold speculation.

This downturn is despite record physical demand. Note however, the price of gold is largely determined by daily spot paper auctions of the London Bullion Market Association (a consortium of large banks). The world’s paper gold market (spot trades = all derivatives) is a fractional banking system that is highly leveraged; it annually trades about 8X the amount of gold that has ever been mined.

Based on analysis of the 20-year price record, I documented the seasonality of the gold price in a brief musing posted in early January.

Therefore, I expect gold to hit a low between mid-June and mid-August every year.

And as a final note, Canaccord recently noted what Tony Lesiak (its head mining analyst) thinks is in store based on past pull backs.

"Since April 29, the gold price has pulled back by 5% and the HUI is down 12%, which compares to an average gold price decline during the five previous instances of 8.5% for the gold price and a 25% HUI pull back, suggesting we have some room to go still. However, mining gurus at Canaccord Genuity note that this years’ January-April gold rally has been one of the most intense, with HUI averaging 1.9% per day and has left many investors feeling left behind and looking for entry points. Thus while the gold price may see further summertime weakness, there are expectations that equity dips will be bought and help mute possible weakness."