SilverGoldStocks.com/GoldSilverInvesting.com

List of Worldwide Gold Miners

WHAT DICTATES THE PRICE?

How it should be: Supply x Demand = price

How gold and silver are priced:

Supply x Demand x Governments (including IMF) x Commodity Trading (COMEX) x Hybrid Securities (ETFs)= Price

Let's break this down -

Supply: What is estimated in the ground both estimated and proven, what is mined/in process/inventory, and what is in use/stored

Demand: What people/business/government need to fulfill their needs/wants.

Governments: The power of governments to dictate price by market manipulation to meet their needs/wants

Commodity Trading: The ability to create contracts that can represent actual assets or paper assets

Hybrid Securities: Baskets of real assets (bullion), IOUs, and derivative securities representing leases on physical assets

SO HOW DOES A SMALL INVESTOR PLAY THIS GAME?

It's easy to see a small investor is really only riding behind the major market makers.  For example, how do you look at supply numbers in the equation when options and derivative securities representing only paper bullion can flood the market. How do you play against government entities that manipulate production/inventory numbers/provide misleading information/and buy and sell on their accounts for the benefit of the select government.  Add to the fact a major find of either gold or silver may also swing prices (look at what is happening to the price of natural gas today due to new drilling methods unlocking market changing amounts of new reserves). 

For the small investor to take a long position in this market you have to rely on trends/luck/beliefs.  Do you see a trend like inflation or possible currency devaluation to drive prices higher?  How about new technologies generating increased demand (like silver in next generation batteries).  Do you think the worlds economic wheels will fall off and fiat money will be replaced by hard currency? Do you just enjoy stacking gold or silver coins?  

So, what do you do now?  Just DO IT.  Make precious metals a part of your overall asset portfolio.  Buy what you are comfortable with be it mining shares, commodity contracts, ETFs, or bullion.  Dollar cost average and spread between different metals. If you are long, hopefully the wave will carry us all up.