Opportunity Alert: The New Gold Rush

Posted on | February 26, 2009 | No Comments

On January 24, 1848, James Marshall’s discovery of gold near the American and Sacramento rivers in California kicked off the great Gold Rush.  Inspired by Marshall’s fortune, thousands of miners and prospectors packed up and headed west in search of fortunes of their own.  A few became suddenly, fabulously wealthy; many others were swindled, unlucky and devastated.

That’s all history, right?  Well, as it always does, history is, once again, repeating itself.   The recession has created international demand for safe-haven, and that has driven gold prices up exponentially and created a new gold rush.

This time around, the action is still in the West (the top 12 gold-producing states are out West).  Miners and prospectors are better prepared, better equipped and better informed, but the hope that drove Appalachian miners and other American and immigrant workers to the Western Front is still alive.  Record trade prices are creating a sort of call to the wild that even the most steeled skeptic can’t ignore.  Last Friday, gold prices reached $1,001.80 per ounce.  Prices have since dropped below $1,000 to $966.20.  But, gold is still up about 9 percent this year, and analysts expect prices to rise in the coming months as the government floods the economy with stimulus dollars.

Want in on the bonanza?  Well, put away your pan and knee-high rubber boots.  Getting in on the real gains requires research and a few wisely invested dollars.

GOLD RUSH INVESTMENT OPPORTUNITIES:

• Investing in exchange-traded funds (ETF) that own gold bullion (versus mining companies).

• Purchasing equity in a mining company (Not as expensive as it sounds, as little as $25,000 buys you a stake in a mining company).

• Purchasing mining company stocks, i.e. Newmont Mining Corp (NYSE: NEM), Barrick Gold (TSX: HCX) or GoldCorp, Inc. (NYSE: GG).

• Investing in mutual funds that include stocks in gold mining companies.

Related news: Gold’s Perfect Storm Rages On from Wall Street Journal

Resources:
CNNMoney’s Commodities Trading Center
London Bullion Market Association’s Precious Metals Forecast 2009
U.S. Geological Survey (USGS)
National Mining Association (NMA)

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