Short-term play for gold One short-term play on gold is buying options on the VanEck Gold Miners ETF (GDX) The GDX is the ETF that holds mining stocks. As gold continues to go higher, these mining companies should continue to outperform as well. I first recommended getting into GDX back in February, and as you'll see by the chart above, its been on the rise. Long-term play for gold When it comes to finding the best gold companies for long-term plays, it's crucial to find companies that focus on shareholder value. But the truth is... not all gold companies operate this way. Take Barrick Gold (GOLD), for example... Barrick is focused more on transactions. In fact, its gold production hasn't increased over the last 7 years - despite increasing its reserves from 77 million ounces to 125 million. Overall, this transaction-first focus is the reason Barrick hasn't approached new all-time highs despite gold's recent surge. Here's how you know if a company is focusing on shareholders. If a company is willing to issue shares in private placements and financing provided that dilution will be faster than shares outstanding, then you have a company that's focused on shareholder value. YOUR ACTION PLAN Overall, when it comes to finding gold companies, it's important to look for companies that are trying to grow ounces from the ground rather than outstanding shares. And I have one gold company that fits that bill. It's currently trading around $12, and I believe it's the most cost-effective way to get in on the metal right now. Click here to unlock my "Ultimate Gold Play." |
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