I have taken a much different approach to playing precious metals.

Rather than choosing a few producers and buying individual stocks, I've taken the shotgun approach and bought precious metals ETFs. My reason for doing so is that all gold producers will fluctuate in price with movement in the price of gold and provide more leverage than holding the metals itself. As gold increases over time so will the stocks. The differences will come from those which either have large reserves already or are in a position to create reserves through new discovery and/or Acquisition.

Rather than guessing which ones they are, If I own them all I'll make some money. Small companies just entering production have lot's of upside but with the state of affairs as they are, they're bnot moving much.

some gold etfs are

XGD:tsx (ishares)

HGU:tsx (Horizons beta pro gold BULL) plays gold sector with 200% of underlying returns.

For US investors GDX:Amex MArket Vectors Gold Miners. (similar holdings to XGD but in USD)

As a hedge I will often trade HGD:tsx which is a inverse fund that gives -200% of the underlying return of gold stocks ... I've been holding this for just over a week now.

I also like the energy sector long term. A rise in the price of oil by $10 might just keep the TSX compsoite in the green this year.