Following up on our gold mining stocks

Article Excerpt

Gold hit a high of $850 an ounce in 1980, then worked its way downward for 25 years. It began rising again in 2002, and rose to a record high of $1,011 in March 2008. Gold moved down after that March high, to a recent low of $750. That, in turn, pushed gold mining stocks down. However, gold recently jumped $66 in one day, to $851, due to turmoil in financial market, This had a positive impact on gold mining stocks. We’re not convinced that gold prices will move significantly higher, or even hold their recent gains. However, some of the conditions that typically accompany higher gold prices are present. U.S. economic growth has slowed and stock markets have dropped. That’s keeping interest rates down. Those lower rates, plus still-high energy prices, could push inflation up. Either way, we still think the best way to participate in the gold market is through companies with sound production, positive cash flow and strong growth prospects,…