Junior Gold Miners May Be the Best Stocks to Buy in 2009

Junior gold miners have been beat up as much, if not more than the rest of the market. With gold holding its ground and the combination of growing economic uncertainty with probable inflation ahead, these gold stocks may be poised for massive stock market gains that you can profit from.

Although gold has held strong and is back above $900 per ounce, these small exploration companies have seen their stock prices drop to the tune of seventy to eighty percent. Many of these stocks have recently doubled from their lows and are still down substantially from highs they enjoyed at lower gold prices. This is most likely due to the almost non-existent appetite for risk that is currently reflected in the markets.

The lack of financing available has made these already speculative investments less attractive, but this may have been overdone. An example of this is an company based in Alaska NovaGold. They sit on a massive quantity of gold reserves in the resource rich region and have partnerships with Barrick Gold, one of the largest and most well funded companies in the sector. But in the last quarter of 2008 NovaGold reported that they couldn’t renew a credit facility due to frozen credit markets. The share price dropped from $3.33 to under $.50 in four weeks, closing down as much as 65 percent in one day.

Selling was certainly a prudent thing for investors to do, or was it? Was this a time when the fear level was so high that the selling was overdone? NovaGold has since been able to replace their credit facility and the stock has risen to around $3.50 per share, a seven fold gain for whomever bought at the lows under $.50.

There are plenty of other junior mining stocks that were trading in the two to four dollar range just less than a year ago and are currently trading for under a dollar. Some of them are actually producing gold, and selling it at a profit. While these are speculative in nature, doing your own research and not putting all your eggs in one basket is important. But if gold continues to stay strong and rises beyond the all-time high of around $1,030 per ounce, there could more triple digit gains in this sector.

Visit http://www.teachmeprofits.com to learn more about massive profits….

Author: Anthony Severino
Article Source: EzineArticles.com
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