Investing in Gold Mining

Video Transcript

"Hello, my name is Mark Griffith. This is a brief introduction into how to invest in gold mines. Some people who want to have an instrument on investments. That goes up or down with the price of gold. Buy shares in gold mines. And this can be, if in a good way. To quickly take advantage of a move in the price of gold. But there are some problems attached to it. First of all, mines and mining companies are like other companies. They can be badly manged or well managed. So you can have a situation where a mine is sitting on some very good mineral reserves. But for some reason, it's badly managed. You can also have a situation where a mine is sitting on not so good mineral reserves. And is well managed. So there's that and there's that element of unpredictability. Another problem is country risk. Quite a lot of gold mines and mining companies operate in countries with unstable governments. South Africa, Russia, a number of other African countries are places where gold mines can be attacked. They can be taken over by groups of bandits during civil wars. They can be close down due to political pressure. There can be strikes. Fro example, recently the price of platinum and lithium in South Africa were hugely lifted. Because there were power cuts. And several mines simply had to be shut down as there was lack of electricity. And that affected the spot price and the future price immediately, around the world. So you need to consider country risk. And you also need to consider what other things the mining company does. So you might have an Australian or a Canadian company that mines a lot of gold. But also mines a lot of copper, mines a lot of iron or other materials. Other metals, other minerals. And therefore, the price can move up or down in an unexpected direction. Because the gold mine might be doing fine. But something else might be happening with the copper mine. So you need to barrel this things in mind. Look carefully, find out about each mining company. And although, it looks like an easy way to trade with gold. And big movements in the gold price. We'll always move the gold mining companies in the same direction. There are extra refinements, extra difficulties that you have to consider. Good luck!"