From Cynthia Scott of OMC Financial Services; Is it better to own the gold exchanged traded fund or gold stocks?
The gold ETF tracks gold’s current price since it owns the physical asset. Gold stocks are related to the cost of mining gold:
>>Delays in construction or production shortfalls
>>Higher cash needs
>>Mine shutdowns
>>Companies have to report earnings based upon all of these factors; some companies are more profitable than others
Gold stocks will react more to the stock market then to the price of gold
Mutual funds that specialize in gold mining stocks may fair better or worse based upon the portfolio
Gold stocks may have an advantage as the price of gold moves up if the fixed cost of mining remains the same
