Barrick Gold Corporation (USA) (ABX): The Cure For Low Prices Is…Low Prices

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Conclusion

The probability of a spike in gold prices is considered quite low right now, just like a probability of a spike in natural gas prices last year. I’m not one to say that gold prices are headed to $2,000. However, that COULD happen. Buying junior gold companies gives an investor a free option on a rebound in gold prices.

An easy way to get exposure to junior gold companies is through the Market Vectors Junior Gold Miners ETF. This ETF is not for the faint of heart, it’s down 55% from its 52-week high. GDXJ’s holdings represent gold projects around the world, offering diversification of resource nationalism risk.

The ETF’s top 10 holdings equate to 31% of the fund. With overall stock markets at all-time highs, an investment in this ETF offers low correlation to the mainstream and significant price appreciation if gold prices surprise to the upside.

The article If Natural Gas, Why Not Gold? originally appeared on Fool.com and is written by Peter Epstein.

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