However, if you want to take advantage of the wild gold price swings, there is a way: gold mining stocks.
These companies generally follow the up-and-down swings of the gold spot price.
The difference is, both the rise and fall is bigger.
Think of gold mining stocks as a leveraged play on the gold price.
When the gold price moves higher, so do gold mining stocks.
You can see this extreme volatility in the chart below:
Here we have the gold spot price in US dollars (orange line), and two gold mining companies, Newcrest Mining Ltd [ASX:NCM] (blue line) and Silver Lake Resources Ltd [ASX:SLR] (red line).
Compared to the gold price, both Newcrest and Silver Lake Resources have drastic price swings. When the gold price rises even slightly, both stocks jump higher.
It’s a similar story when the gold price falls, however. Both NCM and SLR have large share price falls when gold dips in the short term.
Investing in gold mining stocks is one way to take advantage of volatile gold prices.
If you’re keen to learn more about how to profit from gold mining companies — including gold producers and explorers — then this section on gold stocks is a must-read.