Gold: Time to Get Down (AUY, AEM, KGC)

Uncertainty and fear of the Recession lasting until the end of time caused massive selling this week and more stocks to be shorted, like Starbucks (NASDAQ:SBUX).  As the fear heats up, there's only one way to look, and that's to Gold Stocks such as Yamana (NYSE:AUY), Agnico-Eagle (NYSE:AEM), and Kinross Gold (NYSE:KGC).

Gold, the classic inflation hedge and "safe haven" for investors scrambling to hold on to their precious portfolios.  Gold prices closed slightly higher Friday, finishing the week with a gain amid signs that a drop in consumer prices is moderating.

Part of gold's appeal is that it shelters investors from the potentially damaging effects of inflation on other assets, like the dollar. So any sign that prices are stabilizing tends to give gold a boost.

Gold for June delivery added $2.90 to settle at $931.30 an ounce on the New York Mercantile Exchange. Prices finished higher for the second straight week, adding 1.8% on top of a 3% gain last week. For the year, gold is up 5.3% for those home games, but so what? 

Timing is everything in 2009.

Now is the time for gold stocks, the Masters agree with Andrew Mickey from Q1Publishing.com:

Unprecedented sums of money have been pouring into gold in the past few months…

Just take a look at the recent money which has been put into gold companies across the board. They’re all getting new cash. Major miners looking for extra cash to fund takeovers, exploration, and mine development are getting it. Small gold companies looking for one more financing to put themselves into production are getting it too. There’s money out there for gold.

Newmont Mining (NYSE:NEM) is expecting at least $1.7 billion (or more depending on the final terms of agreement) in new cash in its coffers.

Leading the charge in putting this financing together was Citigroup, J.P. Morgan, and BMO. They’re the big money. And they (except for BMO) wouldn’t have given gold the time of day when private equity players were chasing after real estate, Chinese companies, and other “hot” sectors over the past few years.

Of course, it’s not just one big deal though…In the past few months there have been a slew of financings of gold companies. Together Yamana (NYSE:AUY), Agnico-Eagle (NYSE:AEM), and Kinross Gold (NYSE:KGC) have attracted more than $800 million in new money.

Since then, a lot more big money investors have jumped on board. Leading hedge fund managers David Einhorn and John Paulson have put hundreds of millions of dollars into gold. Other fund managers have moved in too.

For instance, Pequot Capital Management, a hedge fund with more than $4 billion in assets, recently ramped up its gold exposure by 997%. Pequot plowed more than $250 million into gold in the past few months.

That's right, back to the article title --  Gold: Time to Get Down.  Get up, get, get, get down

Highfields Capital did too. The fund management firm, with as much as $10 billion under management, has taken a strong liking to gold. In the last few months it has bet big on gold. It has increased its gold exposure by 302% when it threw more than $150 million into gold.

There are plenty more money managers who have spotted opportunity in gold. They appear to be wading in too. Gold stocks have been doing just as well as most other sectors during this rally. With the big money buying gold, there is a lot more potential upside in gold and gold stocks.

Got Gold Masters?  Just another investing option to consider during these turbulent market conditions, hang in there America.