We put together this helpful article to assist those who might be thinking of investing in gold stocks. When it comes to investing in gold, there are a few ways you can do it. You can go for straight bullion with bar stock or ingots like those from Johnson Matthey or you can invest in bullion coins such as the American Gold Eagle or Canadian Maple Leafs. You can also invest in gold coinage that is, or was, used as legal tender such as the $20 Gold Double Eagles issued from 1850 through 1933. However, for those who play the stock markets and wants to work at the source, you’re looking at investing in gold stocks instead of hard metal.
Gold stocks aren’t actually about the gold itself. It s more about the companies around gold, most notably, the gold mine companies themselves. Two major gold indexes keep track of the most important gold mines and are also the most watched for changes. The most popular is on the New York Stock Exchange and is the Arca Gold BUGS (Basket of Unhedged Gold Stocks) Index, also known as the HUI index because of its stock symbol. This index keeps track of only gold mines while the other popular index, the Philadelphia Gold and Silver Index (XAU) keeps track of both gold and silver mines.
As with any company, gold production companies have fluctuating values and, for those who play near term values, close attention has to be paid to the stocks listed on these indices. However, the overall performance of these companies, since they hit the bottom in 2000, the HUI index has become the best performing group of stocks on the American stock market, rising by some 1600%.
All in all, for those who play to the fluctuations in the market, close attention has to be paid to the daily ups and downs just as with any company. However, as a longer term investment, picking the best performers such as Barrick Gold, Goldcorp and Newmont Mining and stocking with them for the long haul can be your best return on your investment.
Current Gold Price $1646.50 per oz