Should I Invest In Gold Stocks Or Gold ETFs?

The price of gold bullion and thus gold ETFs have been extremely volatile, especially these past several months. Many experts are urging investors to consider waiting to invest in order to first determine where gold is headed however I would say we are definitely still in bull market territory.

October is generally a weak period for gold. Sixty percent of the time stocks have been higher since 1950. In general, the returns only average around one percent. Most often, the London PM Fixing Price for gold usually loses an average of 0.9 percent during October. This is quite a contrast to the bull market in August. Volatility may remain high for approximately a week or two. So far November looks like it’s rebounding and should do well over the next 6-18 months.  Rather than buying an ETF however, you could be a bit more aggressive and look at a few select gold stocks that typically have performed well during this gold bull:

Gold Stocks To Watch

US Gold. US Gold trades on the NYSE under the symbol UXG. This company participates in gold, silver and precious metal exploration, as well as, the sale of gold. The company’s total share amount equates to 107.66 million shares. Currently, this quarter 6.7 million shares were purchased. The amount represents 6.22 percent of the total number of shares. Insiders purchased 3,067, 000 shares totaling 2.85 percent of the total share holdings.

Vista Gold. Vista Gold engages in the acquisition and exploration of gold in Australia, Indonesia and North America. This quarter 13.3 million shares were purchased. This represented approximately 21.31 percent of the company’s total shares. Currently, the company controls 62.4 shares. Insiders purchased 29,500 shares. This comprised 0.05 percent of the company total share holdings.

Midway Gold. Midway Gold also engages in exploration and acquisition of gold in North America. In the current quarter, 10.7 million shares were purchased. The amount represents 14 percent of the company’s total share float of 76.41 million shares. Insiders purchased 100,000 shares over the past six months. This amount only comprised 0.13 percent of the company’s share float.

Other Gold Investments. Mega Funds Managers are considering several gold value stocks each with varying volume and degrees of liquidity. Currently, they are managing between $100 billion and a trillion dollars. Overall, gold has had a huge rally since 2005, and now, the market is bearish. The stocks are primarily related to the exploration of gold in countries such as Mexico, Venezuela, Indonesia, North America, South America, Chile, Canada and countless other countries. In June, the Mega Fund Managers sold $1.53 billion net from their $106 billion. Specifically, the company bought $7.26 billion and sold $8.79 billion.

Summary

Even with the problems of the world economy, gold is still shining as bright as ever.  ETFGold.net states we’ve been in a bullion bull market for a number of years now which is likely to continue for at least another year or so.  During this time it would be prudent to own a gold ETF or a handful of good gold stocks as outlined above to truly take advantage of this gold market.  Just be sure to think about selling once gold gets above $2200 per ounce or so as that is viewed by many commodity experts as a likely top before heading back down to average price levels.

This was a guest post from EFTGold.net

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