Gold prices rose sharply for six weeks, gold prices reached 10 percent. But gold mining shares declined. Analysts expect investors still doubt the gold price increase can last long, so the investors take a step to wait until the price of gold reached the highest prices and stable.

Peter Spina, a web of investors, goldseek.com: “There are quite a lot of anxiety among the core investors, the gold bugs, the flight of gold.”

“Many investors are sitting on the sidelines, but once the gold to prove themselves, they’ll be right back.”
Jeffrey Nichols, managing director of American Precious Metals Advisors, said the rebound in the stock market since the recession of last year means the competition to get money from other investors and stock-based gold Exchange-Traded Funds, or ETF.

“Equity markets are still very strong and investors who might go into gold company stocks see competition in other stocks,” he said. “The introduction of gold ETFs appeals to people who might otherwise buy gold company stocks. It’s as easy as buying shares and gives you a proxy for buying gold.”

Nichols said stocks are subject to risks which are not shared by gold bullion or ETFs.

“There is management risk, country risk, labor risk and mining costs are always increasing, so many investors see these things and are attracted to ETFs instead of buying shares.”

Since Sept. 1, the New York gold futures price has risen from $953.50 per ounce to $1,048.60, passing the previous record high of $1,030 last Tuesday.

But in comparison, the S&P Gold Index which tracks gold mining company stocks, has fallen by about 12 percent since July 2008.

Top gold miners Barrick Gold Corp and Newmont Mining rose last week as gold took off. But Newmont was trading around $46.50 on Friday, below its 52-week high of $49.84 in June, and Barrick’s share price of $39.48 was off the $41.98 high last month.Frank Holmes, chief executive officer of U.S. Global Investors, a fund manager in San Antonio, Texas, said gold historically has rallied in September, followed by a correction in October or November.

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