The precipitous fall in the price of gold from early September through the end of the year has caught the attention of most investors. Investors may be happy they were not in the yellow metal as others are wondering if they should continue to hold onto the commodity. (For more, see 5 Best Bets For Buying Gold.)

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On Sept. 9, 2011 gold hit an intraday high of $1,923 per ounce and everyone, including myself, was looking for the $2,000 level by the end of the month. From that day on, it has been a struggle for gold to put together a sustainable rally. It has found some footing since hitting a low of $1,523 on Dec. 29, 2011 and it is now back above the $1,600 mark.

Buying into the Pullback
When I look at gold, there are two likely scenarios and both have the precious metal higher in the next year. If the situation in Europe gets worse, it will lead to a recession in many areas of the world and gold will become a safe-haven investment. If Europe situation does not lead to a global recession, and if slow but steady growth continues it should lead to a lower U.S. dollar and higher gold prices.

Therefore, the recent pullback should be an opportunity for investors to enter into gold at a discounted price. The two largest exchange-traded funds (ETFs) that offer up exposure to gold are the SPDR Gold ETF (ARCA:GLD) and the iShares Gold ETF (ARCA:IAU). Both will track the spot price of gold and basically mirror each other. The expense ratio on IAU is 0.25% and GLD is 0.40%.

Gold Miners
For investors that would like to take advantage of some possible leverage and want to gain exposure to the companies that get the metal out of the ground, there is the option of the gold mining stocks. Historically, the mining stocks will have a higher beta when compared to the spot price of gold. For example, if gold rises by 10% the miners historically will do better, and vice versa. This is not always the case, but can be used as a general rule of thumb.

The Market Vectors Gold Miners ETF (ARCA:GDX) is a great way to gain exposure to the gold mining sector without choosing an individual stock. The ETF is made up of mainly U.S. and Canadian miners (78%) and the two largest holdings are Barrick Gold (NYSE:ABX) and Goldcorp (NYSE:GG). The expense ratio is 0.53%.

Another option for the investor that wants to take on even more risk is the Market Vectors Junior Gold Miners ETF (ARCA:GDXJ). The ETF is heavily allocated in Canada and Australia (86%) and is composed of 83 stocks with only one, Alamos Gold, making up more than 5%. The expense ratio is 0.54%.

For the investor that wants an individual gold stock, my choice is Royal Gold (Nasdaq:RGLD). The $3.89 billion company has held up much better than its peers and is quite unique. Instead of doing the actual mining, Royal Gold owns royalty interest in various mines around the globe. The stock recently pulled back to support at its 200-day moving average near $70.20 It looks poised to continue the trend higher in 2012.

The Bottom Line
As gold ran from $500 to nearly $2,000 an ounce, I heard investors complaining they needed a pullback to get into the metal. Wake up! Here is your pullback. By buying into gold when it is off nearly $400 from the recent high, you are increasing the reward-to-risk setup. And if one of my two scenarios comes true, investors will be happy with the opportunity in the future. (For related reading, see The 5 Best Performing Gold ETFs.)

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At the time of writing, Matthew McCall did not own shares in any of the companies mentioned in this article.