The rule of thumb is three to one ratio. So if gold doubles the...

The rule of thumb is three to one ratio. So if gold doubles the gold shares rise by factor of six.

For example, gold quadrupled from $250 to $1000 between 2001 and 2008. The HUI increased by factor of 12 from 42 to 505.

The relationship has been muddied recently because production costs have been accelerating (the above relationship assumes costs remain fixed). But now costs are stabilising, even reducing, the relationship should reassert itself.

So if gold increases by 1.5 factor to $US 1500 from here, LGL could go up by factor of 4.5 x $3.50 = $15.75

Rowingboat.