Gold and silver stocks represent an alternative to purchasing physical gold; mining stocks are equities that allow investors to purchase shares in a company that explores for, and mines precious metals. These stocks are sold by the company to raise funds for exploration and incredible returns are paid if they strike it rich. Mining stocks are too risky for many investors but an anticipated climb in prices for these stocks bodes well for owners of physical gold as well.
Mining is a very uncertain business; most of the exploration projects undertaken amount to nothing, meaning that a million shares of gold or silver stock bought at five cents per share is only $50,000. If the project fails, the investor loses everything; if the project hits, that $50,000 investment could turn into millions or more as the share price rises.
For investors in physical gold, news of predicted mining stock increases should be especially interesting. Some mining market analysts see a correcting of gold prices early in 2010, with a strong price increase to follow; some are predicting prices as high as $1,650 an ounce before the end of the year.
Such results would be the kind of event that could benefit many investors in this precious metal. As investors see prices correct, purchasing bullion or certified coins at the lower prices is wise. Bullion can be held until prices move higher, and then sold for a handsome profit. Certified rare coins also profit from the rise in gold prices, but usually experience better results as a long term investment.
As analysts predict higher gold and silver stock prices, investors in the physical metals should also look for possible increases. Bullion and rare coins continue to hold great promise as strong investments in 2010.
Senior Staff Writer – GoldSilver.org