Those who have made gold investments are rejoicing this week as the price of the precious metal hit a 7-month high. The reason for such a spike has been mainly due to the political uncertainties that followed Donald Trump after his presidential inauguration in January.

While the Vaneck Vectors Gold Miners ETF (NYSEARCA:$GDX) has failed to join the bullish party — leaving investors in a scramble — there are a small selection of gold stocks from junior mining companies that have been attracting investor interest. For investors with good risk-management skills and experience, these junior mining companies could be a gold investment resulting in a large amount of profit.

Although a majority of junior gold companies trade over the counter, the companies that are listed below have made the jump to some major exchanges to Nadaq, NYSE, or Amex through a rapid growth that has been backed up by well-documented and proven sources. As a result,  the risk of being scammed has been reduced — as accounting methods have been verified — and revenues are less likely to be hedged.

Almaden Minerals, Ltd. (AMEX:$AAU)

At $5.35, the shares of this junior company hit an all time high in April 2011 before falling drastically along with the rest of the commodity market in 2015. During that year, Almanden’s shares hit a 7-year low, pricing just under 50 cents. In 2016, the stock recovered to just below $2.00 in July but the good news was short-lived as it plunged again to around 75-cents in December.

Now, it seems as if Almanden is making another comeback, pulling back to the 50-day EMA in May with its shares now testing the 2017 high at $1.88.

As such, bullish relative strength cycles can bee seen in multiple time frames for this company, raising the possibility for a continued rise that could result in shares pricing above $2.00. This can help the company go into the next resistance level — the 2012 high at $3.33.

Alio Gold, Inc. (AMEX:$ALO)

In 2010, Alio went public on national exchanges with a promising share price of $11.30. The company did not disappoint as, only a year later, prices hit $34.40. However, two tests at that level did not trigger a breakout, resulting in a triple top pattern that broke with a downtrend in 2013. In the first quarter of 2016, the stock dropped to an all-time low at 70-cents as selling pressure heightened.

A recovery wave occurred in August 2016 as stocks went above $6.00, allowing for a small scale double top before the December low at $2.70. Since then, the stock has made good progress with prices getting higher in a multi-wave uptick that could potentially drive prices to the 2016 high. Overhead supply into that level has lead analysts to propose that the best trade entry will come on a decline, testing new support near $4.25.

Richmont Mines, Inc. (NYSE:$RIC)

Richmont started as early as the 1990s when it came to trading on national exchanges. The company finally reached double digits in April 2011, hitting a high a few months later at $13.40. Then, like Alio, it posted a triple top before taking a plunge at the end of 2013 which tested the 2008 bear market low of 95-cents. However, support level held which helped paved the way to an uptrend that is still going strong as we head towards the second half of 2017.

Currently, new support below $7.00 is taking hold — a bullish platform with a potential for an uptick that could test the multi-year high. A trendline across the 2016 and 2017 highs offers a handy guide post that suggests a breakout above $8.75 — attracting higher buying interest.

The Takeaway

These junior company gold stocks are now showing a higher resilience than the underlying commodity. This suggests that improvement of certain metrics that could support a lot higher prices in the near future.

Keep in mind, however, that these are still a highly speculative market group, subjecting investments to a higher even risk and reverse stock splits, as well as dilution through a mixture of secondary offerings.

Featured Image: twitter