Current Gold Investment Market Overview 2012 and investment diversification through gold mining stocks:
Gold and silver price trends have been inconsistent this calendar year. The safe haven appeal of precious metal gold and silver has been inconsistent as a result of better than expected economic reports in the U.S. The progressive action observed in the eurozone, relevant to the Greek debt restructuring and resolution planning, is also weighing on precious metal prices and causing price trend fluctuations. Investors have been on edge regarding the potential for debt default in Greece and this applies negative pressure to the euro, and ultimately affects gold and silver prices. Gold price trends often struggle as a result of a strengthening dollar. The dollar has gained strength this year due, in part, to the minimized potential for another round of qualitative easing in the U.S. Federal Reserve Chairman, Benjamin Bernanke, released comments that did not imply support for another round of quantitative easing in the U.S. The dollar value notched higher almost immediately versus a basket of other global currencies, and this action can often diminish the number of investors positioning with gold and silver. Since precious metals are often used as a hedge against a weaker dollar, prices for precious metals often suffer as the dollar gains strength. One can often observe precious metal gold and
silver prices increase when other global currencies, like the euro, gain strength. The debt resolution and financial restructuring plan that positioned Greece to secure billions in bailout funding is an example of action that helped to support the euro which positively affected precious metal gold and silver prices. The euro gained strength and more investors positioned with gold and silver on a
global scale. Gold receives attention as a way to diversify an investment portfolio and there are numerous ways to initiate the diversification process.
There are many different ways one could choose to invest in gold. Investors can select gold futures and options, gold mining stocks, and even gold mutual funds. Gold Mining stock investments are used by many as a means to diversification. Gold Mining stocks represent stock ownership of a company and are traded on one of the exchanges. The stock share price is dependent on two primary variables. Two primary variables affecting the price of the stock are price of gold, as well as the current and future success of the company/corporation. Generally, companies that gold mine work to extract gold from the environment. The process involves exploration, drilling, extraction, refinement, and delivery to a bullion refiner. It is a process of science and since gold is an extremely rare mineral, it is a difficult science to perfect. When developing your investment portfolio, be careful to research the company thoroughly. Remember to diversify your company picks. One should not invest all of their resources in one company's stock options. Look for companies with lots of money in the bank and a lengthy history of returns. It can be wise to invest in several companies already producing gold and/or silver profitably.