robert99

Gold Stocks Look Cheap - BMO

Which is a good thing, since I hold NXG.

Gold and silver miners are a leveraged play on gold. If memory serves me correctly, they tend to move about twice what gold moves in percentage terms - both up and down. Furthermore, there ARE some deals out there, especially miners which have taken on a large amount of debt for acquisitions and expansion and still carry it on their balance sheets. If PM's continue to rise, those company's shares will soar as the market realizes their margins are exploding along with profits, thus removing any doubt about their ability to pay down their large debt loads. CDE immediately comes to mind, but there are others. Juniors will also be caught up in the speculative frenzy; many will become tenbaggers.

Physical metal is good if you are expecting the dollar to be destroyed at some point in the near future. If you don't buy into that catastrophic worst-case scenario, however, and you are bullish on precious metals, miners clearly offer much higher potential for profit.