Gold Stocks For a Falling Dollar
Like many commodities, gold is priced in dollars. So a falling dollar generally means that gold prices will head higher, since more dollars will be required to buy the same ounce of gold. In that environment, you'll want to own gold stocks that are leveraged to higher gold prices. A good starting point is Newmont Mining (NYSE: NEM) for more conservative investors. But if you are a bit more aggressive, consider companies like development stage NovaGold Resources (NYSEMKT: NG) and high cost producer IAMGOLD (NYSE: IAG).
One of the ways miners protect themselves from often volatile precious metals price swings is by hedging. However, that protection can limit upside potential, too. So, if the dollar is falling a miner that doesn't hedge, selling gold at the spot price will have the most upside potential. Newmont stopped hedging in July 2007, with then CEO Richard O'Brien explaining, "With the elimination of our gold hedge book, we have renewed our commitment to maximizing gold price leverage for our shareholders."
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Source: Fool.com