If you are a stock investor, you might have been taking a look at what’s happening in the gold market. On May 7th, gold prices again breached the historical barrier of $1,200 per troy ounce for the second time after December 2009. Now when you invest in a junior gold mining stock company, the chances are that you can get all the benefits of the increase in the prices of gold while at the same time taking advantage of the value driven analysis of a typical small cap.
Read this Investing in Gold Guide by Doug Eberhardt. This might be the best time to invest in gold. With Euro and US Dollar falling, gold prices are going to rise and rise. One way to invest in gold is to invest in gold mining stocks. Do your research, you can easily find junior gold mining companies that are poised to make the big move. Watch this weird 30 minutes Stock Trading Video by Bill Poulos just now. Turn $200 into $100,000 in just 1 month with this Penny Stock Trading FREE Report that shows how to find killer Penny Stocks on the verge of making a massive move in the market!
What this means is that gold prices can reach as high as $7,000 per ounce. Sometimes back, pundits were predicting a possible gold price level of $2,500 per ounce in the medium term future. Then that level was raised to $5,000 per ounce. But now, for the first time, we are hearing about a possible gold price of $7,000 per ounce.
Another argument advanced in favor of gold reaching high prices is the monetary base argument. Gold prices tend to track the monetary base over the extended period of time. Monetary base is the bank deposits plus currency in circulation. Increase in the monetary base is considered to be inflationary. So when expectations of inflation rise, gold prices tend to rise too. Right now, with trillion dollar bailout packages becoming all the rage, inflationary expectations are high!
