As we all know the gold space hasn’t looked better. With the fed continuously debasing the dollar by printing trillions with no end in sight, gold may be set to soar in terms of valuation. This gives investors enormous opportunity in this space, (if they know how to position themselves correctly). Many people tend to rush into gold etf’s or physical gold. I personally prefer the physical rather then a etf. I don’t tend to buy gold etf’s simply because they can make more paper contacts then there is actual gold. Which only brings us back to square 1, where the problem began originally. Printing more government liabilities than the assets stored in the vault, which is “fractional reserve lendingâ€.
Owning physical gold is a smart thing for an investor to do. But if they want to maximize their potential profits, they must look at the gold mining space. Gold mining stocks are where investors should look when trying to maximize this gold trade that everyone has been talking about. Yes, the miners may be a bit riskier, but the upside can be much more rewarding. Let’s take a look at why miners are riskier but will also allow you to have massive leverage in the gold space.
First, you’ve got to find a deposit where the metal is. Then you have to build a mine, which means that you will require tons of labor, and it is capital intensive (it’s going to require large sums of money invested to do so). Then you’ve got to run the whole project to get the metal out of the ground, which is the end goal of course.
After all that work, you get to sell the gold—but you don’t get to decide the price of your product. It’s the market that sets it, so you’re a “price taker.”
If gold prices fall, your business’s revenue fall alongside it. So a gold miners’ business involves lots of fixed costs, combined with a variable sales price. For investors, that means one thing…Gold miners give you massive amounts of leverage to the price of gold. If gold does very well, all these profitable miners will do even better—because their profits are derived from the market price of gold!
I’m extremely excited for the gold mining space, I’ve made several videos on my YouTube talking about gold mining stocks and how to actually find the value within them. Finding a gold mining company is easy but finding the valuable ones are where the investor savviness are vital. I’ve given a few mining companies on my YouTube channel that since mentioning, and they’re up double to even triple digit percent gains. If you guys are interested in finding out more about these stocks leave a comment down below saying “MINERS†and you’ll receive my free gold report to help you find the value in this space!