Part of the recent move up in gold prices to more than $1,400 an ounce and the uptick in gold stocks is a response to the crisis in Syria.
However, there is a lot more occurring just beneath the surface than geopolitics.
But investors would never get that sense from Wall Street, which is still in the midst of its perennial "hate gold" campaign.
Take, for instance, the hullabaloo over the liquidation by hedge fund manager John Paulson of a large part of his position in SPDR Gold Trust (NYSE: GLD).
In the second quarter of this year, Paulson cut his position in GLD from 21.8 million shares to 10.2 million shares. At first glance, he seemed to have lost faith in gold and was getting out.
But, there's more to that story...
The Financial Times reported that Paulson offset much of the sale of GLD by purchasing gold swaps on the over-the-counter (OTC) market.
Part of the reason may be cost. GLD has a management fee of 0.4%. The FT reported that with gold forward curve flattening, there's little cost to holding gold derivatives.
Another reason may be less transparency, making it easier to make a major move. In the OTC derivatives market, not everyone can figure out exactly what Paulson is doing with regard to investing in gold.
The real underreported action, however, may not be in the gold market, but in gold stocks.
More Smart Money Investing in Gold Stocks
Li Ka-shing, 85, is one of Hong Kong's richest businessmen. Bloomberg estimates his net worth to be about $27 billion.
He is also known as one of the world's savviest investors, buying assets on the cheap.
And he recently made a major move into gold stocks.
One of his companies, Cheung Kong Holdings Limited (CHEUY), recently formed a 50/50 joint venture with Canadian Imperial Bank of Commerce (NYSE: CM) called CEF Holdings. They want to invest into beaten-down mining stocks and particularly gold equities.
The CEO of the joint venture, Warren Gilman, told Bloomberg, "Long term, gold is a good place to be."
He added that gold's drop in price this year "is great" because his firm can now make quality long-term investments into certain gold stocks on the cheap.
Gilman said to Bloomberg, "It's tougher and tougher to find economic gold deposits in safe jurisdictions. You [will] see mine supply struggling to keep up with demand long term. That's a great recipe for higher prices in the longer term."
The bullishness of Li Ka-shing and CIBC echoes thoughts expressed recently by Money Morning Chief Investment Strategist Keith Fitz-Gerald.
Fitz-Gerald said, "I could very easily make the argument that gold miners are unloved, undervalued and probably the worst investment of the year. But, we know from history that's precisely the best time to buy. History shows you want to buy when there's blood in the streets."
Gold Stocks Rebound
For individual investors who have fewer resources than Gilman to research specific gold-mining companies, an ETF such as the Market Vectors Gold Miners ETF (NYSEArca: GDX) is a good option for investing in gold stocks.
Since hitting bottom in early July, GDX has soared about 30%. This caught some investors' attention, and now inflows into the fund are up.
But it has more upside potential for investors - and if it dips again, that would be an even better time to follow Li Ka-shing and others into gold stocks.
More support for investing in gold stocks now is the gold-stocks-to-gold ratio flagged by Money Morning Global Resource Specialist Peter Krauth. Krauth said this indicator is flashing the best buy signal in a dozen years.
In fact, Krauth found four bullish gold-price indicators all flashing buy signals now. Take a look...
Why Gold Mining Stocks Are a Buy Now
Today's Gold Convergence Is Your Best Buy Signal Yet
Paulson Slashes GLD Stake
Paulson's Faith in Gold Unshaken Despite ETF Sale
Li Ka Shing -Backed CEF Seeking to Make Gold Investments
A Double for Popular Gold Miners ETF? Maybe