This is the perfect time to get into Gold.  Here are five reasons why:

1.       Hedge books close.  Most major gold producers have closed their hedge books.  This implies they believe spot prices to rise, and for those prices to remain stable, or on an uptrend.

2.       The record deficit in the USA has just been increased by $1.2 trillion dollars.  That’s not the deficit…that’s the INCREASE in the DEFICIT. And with four Euro economies on the verge of bankruptcy, there is little choice for investors to run to anything other than gold.

3.       Four more banks have just closed in the USA. That’s 26 bank closures since January!  Furthermore, the US Federal Deposit Insurance Corporation (FDIC) has warned that the pace of bank failures is likely to pick up in coming months.

4.       China’s stimulus package is working.  And China is hedging against the US dollar.  The higher income of Chinese citizens, along with an exploding middle class will increase demand for gold for industrial and consumer applications.  The lower investment in US dollars will leave investment dollars that must be deployed somewhere.  Since they’ve already invested in their own country and partnered with oil rich nations the US has alienated, and given the recent instability in the Euro, the only place China can place all its dollars is in gold.

5.       US investor opinion is bearish on gold at the moment.  Dr. Steve Sjuggerud, of DailyWealth, recently wrote:

“Back in December, the "sentiment surveys" showed investors were at highs for the year. Now that has changed. Two weeks ago, public opinion hit its lowest level since last April (when gold was at its lows for 2009, below $900. Now THAT was a time to buy). That's what we want to see.

Investors have also fled gold stocks since December. For example, the Rydex Precious Metals Fund saw its assets fall by more than half from December to today (from over $350 million to $177 million now). Traders like to use Rydex funds to chase trends. They were bullish on gold stocks in December. Now they've given up on gold stocks. That's what we want to see.

Meanwhile, gold's "price action" is just great right now. The dollar has soared in recent weeks. But gold is soaring more. Also, investors who didn't want dollars now don't want euros either. They don't want paper currencies at all. They're buying gold. New highs are part of bull markets, and gold is now hitting all-time highs in terms of euros. That's what we want to see.

The bull market in gold is back!

Typically, I'll try to find a crafty way to get into an attractive asset. I try to find a way that has extraordinary upside with little downside risk.”

For all the reasons above, I agree with Dr. Sjuggerud.

It’s definitely time to pick up gold stocks.  But why not have an extra layer of protection? When buying gold stocks, the best stocks to buy are penny stocks.  And the best bet in pennystocks are those that will soon be promoted.

A favorite in the running is Source Gold Corp. (SRGL.OB).  It’s got great assay results, is in the right location and has recently come off in price along with investor sentiment in gold.  But as stated the penny stock jockey website, www.pennystockjockey.com, a site that prides itself on choosing stocks it believes are about to be promoted, SRGL has a long way to grow.

“We had a great run on SRGL.  Especially for those of us who got in early.  It’s still up 29% from our entry point.  And it’s got room to go.  A lot of room.  As you know, a stock can’t just keep going up.  It has to go back and fill in the gaps.  That’s what it’s doing today, and maybe tomorrow.  In the next month, I still believe a double is possible from this level.  The research report, available at the Rimini Investments website, www.RiminiInvestments.com, is estimating a short term Estimated Price Per Share Projection (EPPSP) of $1.64, and a two year EPPSP of $2.73.  I’m bidding the stock again at $0.78.”