GDX: Timing The Market And The $2,000 Floor For Gold

Summary

• The need for monetary and fiscal intervention into the markets creates a long-term bull market for the price of gold.
• Although a more direct exposure to the precious metal makes sense for long-term investors, gold miners appear attractive right now.
• The market is pricing a too pessimistic scenario for margins of high quality gold miners which reduces downside risk.

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Holding gold and precious metals as part of an equity portfolio has fallen out of favour over the past decade as supportive monetary and fiscal policies created the illusion that risk is non-existent.

In recent years, however, the case for holding gold

Analyst’s Disclosure:I/we have a beneficial long position in the shares of AEM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Please do your own due diligence and consult with your financial advisor, if you have one, before making any investment decisions. The author is not acting in an investment adviser capacity. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. The author recommends that potential and existing investors conduct thorough investment research of their own, including detailed review of the companies' SEC filings. Any opinions or estimates constitute the author's best judgment as of the date of publication, and are subject to change without notice.