With the re-election of President Obama, gold bulls received some good news. The notion that the President will continue to run huge budget deficits, be accommodating to more quantitative easing programs from the Federal Reserve as well as continue stimulus policies, is a positive driver for long-term higher gold prices. As such, investors continue to flock towards exchange traded funds like the SPDR Gold Shares (ARCA:GLD), which tracks the precious metal. Despite gold prices rising by over 444% during the last 10 years and 117% in the last five, the companies that dig the shiny metal out of the ground continue to yield paltry returns. For investors, these stocks could have some serious value, given the cooperative higher gold price environment.

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Higher Prices Ahead
With monetary inflation and debt issues still plaguing much of the developed world, a variety of analysts are sticking with their predictions that gold prices will continue to climb over the next few years. Those predictions got another hefty boost with the re-election of President Obama. According to bullion storage firm - The Real Asset Company - the price of gold has typically climbed higher under democrats presidents versus republicans. Since America stopped using the gold standard for its currency, gold has surged nearly 360% when democrat presidents have been in power. That compares to the precious metals jump of 121% during republican presidential terms. Mitt Romney had already pledged to fire Fed chief Ben Bernanke, if elected president, and close the easy-money spigot.

With President Obama still in charge, analysts predict that gold will reach record highs over the next 12 months.

Given those higher prices, investors may want to turn their attention to the miners that dig the stuff out of the ground. So far, the miners have underperformed gold. However, as the safe haven metal continues to rise, the miners should do better as their share prices typically rise faster than the price of bullion. That's due to a leverage effect stemming from relatively stable fixed costs and the fact that their profits are typically magnified by changes in the price of bullion. Overall, if you believe that gold should do well, then the mining firms should reflect that strength and do slightly better.

Then there's the income potential to consider. One of the biggest arguments against gold is that it throws off no income or interest. However, many of the largest mining companies have instituted new dividend policies linked to the price of gold. While the yields aren't utility-sized yet, the sector can now offer both real income potential as well as a growth element to a portfolio.

SEE: 8 Reasons To Own Gold

Digging the Earth
For investors, the Market Vectors Gold Miners ETF (ARCA:GDX) has historically been the proxy for the sector. However, a better bet may be the iShares MSCI Global Gold Miners Fund (ARCA:RING) undercuts on fees, while providing exposure to roughly the same group of firms. The ETF tracks 51 different miners, including Agnico-Eagle Mines (NYSE:AEM) and Kinross Gold (NYSE:KGC). The fund's low expenses (at 0.39% and 1.15% dividend yields, respectively) make it an ideal buy and hold investment in the sector. Likewise, the Global X Gold Explorers ETF (ARCA:GLDX) allows investors to bet on some the junior miners, which represent a play on new mine supply.

Some of the biggest gold plays could be in the largest miners as they begin to dole out some serious dividends. The trio of Newmont Mining (NYSE:NEM), Gold Fields Limited (NYSE:GFI) and Barrick (NYSE:ABX) represent some of the biggest and strongest dividend-payers in the sector. Newmont led the gold price-linked dividend charge back in late 2011, while Barrick operates as an un-hedged gold producer. Meaning, the company stands to benefit from any appreciation in gold prices. Shares of the three firms yield 2.9%, 3.1% and 2.2%, respectively.

SEE: The Power Of Dividend Growth

The Bottom Line
President Obama's re-election could be the necessary catalyst to propel gold prices much higher over the next few years. However, as gold prices continue to rise, gold miners could be a better way to play those higher prices. For investors, the sector remains a bargain. The previous picks, along with firms like Eldorado Gold (NYSE:EGO), make ideal selections to play the sector.

At the time of writing, Aaron Levitt did not own any shares in any company mentioned in this article.

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