By Kishori Krishnan
Gold prices have shot through record highs two weeks ago and have since stayed in a lofty range of $1,050-$1,060 an ounce, due largely to a plunging US dollar.

Two years ago, similar circumstances would have sparked predictions of an mergers and acquisition (M&A) feeding frenzy, but acquisition-minded miners are now exercising caution in valuing targets.

Why is that? Aren’t the record gold prices an ideal bait?

Fears of gold price retreating could have kept M&A’s at bay and investors should realize that some juniors could well go belly-up.
After all, no investor wants to end up acting like a newbie at a horse race - placing bets based on the name of the horse or the flash of the jockey’s colors.

So, one should train one’s sights on finding deals that could add value to the portfolio. Though funds are putting cash back into the junior gold sector, they are also being selective about where it goes. Details like resource potential and political risk actually matter again, which was not always the case in the heady days of 2004 to early 2008.

Moreover, there are frankly very few quality stories that have the potential to be mines. For, there has been a Darwinian culling of companies.

So, how does one separate the wheat from the chaff?

Courtesy: www.goldinvestingnews.com