Why junior miners must take off soon -------

This week the London Bullion Market Association (LBMA) released the forecasts precious metal experts in its annual competition.

Most years, Ross Norman of The Bullion Desk wins - and most years he makes the most bullish forecast. He has again this year. He reckons gold will hit a high of $1,250 an ounce before the year is out, and won’t sink below $840. ---------

Why are the junior mining companies lagging so far behind?

----- Here are some possible answers: ------

----- exchange-traded funds (ETFs) might be a factor. Why take individual company risk; why even bother doing any research on a company, when you can just buy GDX, the ETF which tracks the HUI index of gold miners? And if you want leverage, you can just trade options on it. So I think the ETFs have taken huge amounts of capital that would otherwise have gone into juniors - capital that pushed them higher in previous moves when the GDX didn't exist. ------- However, money can’t keep going into large cap miners and ETFs indefinitely. At a certain point, it has to go into the juniors.  

Valuations are extremely compelling, and soon we are going to see a flood of mergers and takeovers – it’s inevitable that money will start to flow in. --------