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-- Posted Wednesday, 3 June 2009 | Digg This Article | | Source: GoldSeek.com
With the gold price closing on $1,000 and silver just through $16 an ounce again, gold stocks have been showing big advances in the past week. However, it is still possible to find quality junior gold exploration stocks with prices little changed since the wipe-out last autumn. These are almost certainly the last great bargains available in this bull run for precious metals. Dot-com parallel The obvious parallel is the dot-com stocks in the IT boom of the late 90s, which rose exponentially late in the day on unrealistic expectations about the future. For junior explorers are a gamble at the best of times. But they do actually own the claims to future gold and silver mines. In a true bull market for precious metals the values of these mineral exploration rights will rise exponentially as it becomes economic to explore for gold and silver with the prize for discovery rising sharply in value. If you want to own those claims buy juniors. However, this interest comes later in the precious metal investment cycle. You need to see higher prices first, and think that they are going to last or go higher, before you commit to an exploration project. But that leaves a big opportunity for early investors. The companies with those absolutely essential claims are out-of-favor and available on the cheap. The art then is to separate the wheat from the chaff and buy the better juniors before others wake up to the idea. It is tempting to give a small list of such juniors with excellent claims in politically stable regions but that can wait for another article. It is only too easy to be dismissed as a share tout when discussing this asset class, and that overshadows the investment argument. Stock selection So where is the flaw in this case, aside from the difficulty of stock selection for which a number of good websites exist? Well, we saw that last autumn when a general stock market crash pulled down the gold price and crashed the juniors. Will that happen again? It is not impossible, but if the price of gold and silver continues to rise – and with bonds also under pressure precious metal prices may not fall like last autumn – then the time to buy juniors is now. Sit and wait if you like but that might be too late for the best deals.
-- Posted Wednesday, 3 June 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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Will $1,000 Gold Signal A Rush To Buy Junior Explorers?
