If we are indeed entering a major bull market for the metal then savvy investors should consider buying smaller cap gold mining stocks rather than either the metal itself or the larger miners.
The easiest way to do that via the VanEck Vectors Junior Gold Miners exchange-traded fund (GDXJ – Get Report), which tracks a basket of smaller, so-called junior gold mining firms.
In general, the mining stocks do better than gold when the price of the metal rallies.
But the smaller mining firms should outperform the larger ones, as long as the bullion price remains in an uptrend, says Don Coxe, chairman of Chicago-based financial firm Coxe Advisors.
Smaller cap stocks, such as those in the junior miner ETF, tend to have lower liquidity than do larger cap ones, which means that it takes fewer buyers to move the share prices either higher or lower for the smaller companies than for the larger ones.
I have heard about GDXJ, but mainly follow SPDR Gold Trust ETF, GLD.
However, if Gold can get to $1900 and perhaps higher over time,
Based on history, GDXJ should be able to get to $180, which would be a 6X return based on GDXJ current price.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.