One of the main arguments for holding smaller, junior gold shares is that they offer more leverage to rising prices, and you get more “bang of your buck”. However as the chart below shows, this is not always the case.

Barrick Gold Corp has a market cap of $26.5bln and is the biggest gold mining company in the world. Therefore it fits the profile of a heavyweight gold producer who, according to the thesis of those that invest in junior companies, should move more sluggishly.

However, a quick glance at the above chart tells you all you need to know. ABX has almost doubled in two months, which shows that even the larger gold companies can have nimble stock prices.

Another insight into this move up in ABX is that it shows a renewed interest in the gold mining sector. A junior gold mine can double and halve on a few thousand dollars, but the buying power needed to double the stock price of a $26.5 billion company is much more significant, and therefore this move up in Barrick should be viewed as a very positive sign for gold sector.

We may have seen the bottom and be looking at a substantial rally over the coming months.. Stay tuned to The Gold Prices Newsletter for updates and trading signals as there looks to be exciting times ahead.

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