Gold Mining Stocks: 5 Reasons to Buy Gold & 4 Ways to Profit

by Dr. Scott Brown, Education Director, Investment U

As you know, I’m very bearish on gold. I’ve been in total agreement with Louis Basenese’s 12 Reasons Why You Should Short Gold and his follow-up article, A Clarification on Shorting Gold.

But we’ve been in the minority.

It was early February when Louis originally made those statements, and gold was close to $923 an ounce. Things have changed since then - but not much.

Gold has been on a roller coaster, moving down then up - to just over a $1,000. It has currently pulled back to under $880. The precious metal’s performance, not to mention its disconnection to the markets, has baffled seasoned experts and analysts alike.

For a market in crisis, we haven’t seen gold skyrocket like many would have expected.

Because regardless of the current price of gold moving up or down a few hundred dollars, there are four easy ways you can profit from gold right now. So I’m going to shock many of my bearish brethren and suggest not just why you should invest in gold right now, but how to do it through gold mining stocks called prospect generators.

5 Reasons Why Gold’s still a Buy

There are a number of reasons why I’m bearish on gold. But after eighteen solid reasons from Lou, I don’t feel the need to belabor the point. However, I will say that gold is still on the historically high end of its range and that its value is more dependant upon its commodity position rather than its status as a currency.

But even though I’m bearish, it doesn’t mean that I don’t believe gold shouldn’t part of a diversified portfolio.

As part of our Asset Allocation Model , we hold 5% of our portfolios in precious metals. This can cause more than a bit of “discussion” when readers question why we can recommend buying gold and selling gold at the same time.

Almost two years ago, Alexander Green showed us six reasons why we should be investing in gold. Five of those are as true today as they were then.

• The U.S. dollar is weakening. That makes the precious metal, typically denominated in dollars, cheaper to buy in other currencies.