Over nearly sixty years in the financial business, I have watched several major gold bull markets unfold. While every cycle is different, one feature has appeared with remarkable consistency: American investors often arrive late.

So far, that has not been a defining feature of the current gold boom.

While gold bullion has climbed and a number of gold stocks have tripled, quadrupled or even quintupled, American investors have not participated with the same enthusiasm. In some cases, they have actually been net sellers.

That could become important.

Why I Remain Bullish on Gold

My longer-term bullish view on precious metals is tied in large part to the deteriorating financial condition of Western governments.

I recently discussed Japan's increasingly difficult sovereign debt position. The United States is not far behind, while a number of European countries are confronting significant fiscal challenges of their own.

For that reason, I suspect the move in precious metals and precious metal equities may still have some distance to run.

And if history is any guide, the most speculative phase may come later.

When Investors Turn to Junior Gold Stocks

In previous gold bull markets, American investors eventually began chasing the sector as bullion prices moved higher.

By that stage, many of the large, established gold producers had already appreciated substantially. Investors looking for greater upside then moved further down the market toward smaller junior mining companies.

That is where things can become extraordinary.

Historically, moves of 10 or even 20 times the original share price have occurred among some junior gold stocks during powerful speculative phases.

Of course, enormous upside comes with enormous risk.

An Interesting Junior: Walbridge Mining

One company I currently find intriguing is Walbridge Mining, listed on the Toronto Stock Exchange.

At approximately nine cents per share at the time of this analysis, it sits firmly within what I call the "blue zone", an area normally populated by companies with severely impaired valuations and, quite often, troubled balance sheets.

Walbridge, however, is somewhat unusual.

The shares trade at a substantial discount to book value, yet the company appears to have a comparatively strong balance sheet. Its stability ratio is 10, which I consider very strong, and the company also has cash on hand.

There is another piece of history that makes the stock interesting.

During the previous gold cycle, Walbridge shares traded as high as approximately $1.35.

That certainly does not mean they will return there.

But when a stock currently trades for nine cents, that history is enough to make an investor look twice.

Speculation, Not a Recommendation

I want to be particularly clear about this one.

Walbridge Mining is not an investment recommendation. I am highlighting it because it represents the type of highly speculative junior gold opportunity that can become interesting during the later stages of a precious metals bull market.

Junior miners can produce spectacular gains. They can also produce spectacular losses.

If the current gold cycle eventually attracts the kind of speculative American participation we have seen in previous cycles, however, this is an area of the market worth watching very closely.

And Walbridge Mining is one name that has caught my attention.

Watch the full Weekly Focus: https://youtu.be/idF6iUVADnc

This commentary is provided for educational and informational purposes only and should not be considered investment advice or a recommendation to buy or sell any security.

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