A proposed merger between Xstrata and Anglo American came to an end yesterday. Xstrata put the deal on the table and offered it to Anglo, but the latter company turned down the offer. It did so under heat from Africa.

In fact the mining minister of South Africa said that such a deal would turned the combined company into a monopoly. "That is uncompetitive and in terms of global standards and principles it is just unacceptable," he was quoted as as saying in a Reuters story.

Even though gold is coming off of its highs gold stocks are worth watching as potential buys, because we do expect to see more mergers actually go through. There are limited ounces for gold companies to mine so the big companies have to do mergers to keep their earnings growth high.

However, gold stocks are very volatile and it seems every single year there is a big correction that takes them down for at least a 30% loss. And last year the correction was even worse than that. It takes some basic stock trading strategies to be a able to profit from such swings. To get mine go to my WallStreetWindow trading guide.