Why You Should Own Gold Mining Shares

This year has marked the greatest discrepancy in price between gold bullion and gold mining shares. It's no secret that over the past several months old shares have underperformed pathetically. As a result, many analysts had basically declared this the end of the gold bull market with a yearly forecast for gold being about $700 per ounce, actually less than the price of gold at the turn of this year.

But the technical analysis here speaks more truthfully than any biased analyst's predictions. The charts tell the story of the fall of the US dollar: for years the 80 level was a solid support bottom for the US dollar which it would never breach. At the end of this year's summer season the US , just briefly, struggled to penetrate the 80 level before sinking right back down in its largest one-day loss after. The dollar, which fell from just over this critical level, will likely fall all the way down to 70 before settling as there is no respectable support between those levels. This could have easily been foreseen, as there was a great divide between dollar longs and dollar shorts. As soon as the longs liquidated their positions after hearing about the Feds bailout program $700 billion, the dollar dropped like an anvil. All these forms collapsed and the panic of investors was immediately reflected in the value of the US dollar, which remains an incredibly precarious investment.

Precious metals mining shares, in relation to gold and silver bullion, reached its widest in balance this year -- wider than anything on record going as far back as the 1980's. Last week's closing numbers were one of the worst weeks in the past eight years, but one of the best opportunities for this bull market, which is virtually undiscovered. Mining shares, being sorely undervalued, are a beautiful investment proposition in the year 2008, what with epic monetary inflation on the horizon.

As with so many investments, or more commonly, bubbles, the opportunity is not realized until it's already reached its top. Gold and gold mining stocks are an investment for the average person. Gold is the only reliable age against inflation, and gold mining shares, though somewhat more risky, have historically produced massive gains. But in the current economic environment, it's a safe bet even for amateur or completely new investors.

Buying gold bullion is as simple as visiting a bullion dealer website and ordering gold coins or bars. Gold mining shares can be purchased through any online stock trading website. If you've been considering saving for retirement, you would do well to consider gold as part of your retirement portfolio. Or, even if you just been interested in investing for the first time, precious metals are the perfect place to start, and the greatest gains will always be found in the Canadian mining shares.