LONDON -- Gold has fallen steadily this year from its March high of $1,781 and this week saw further weakness. The markets' disappointment at a lack of immediate action by the European Central Bank made itself felt on the price of gold, which abandoned the gains made in the first part of the week and retreated to below last Friday's closing figure of $1,601. At the time of writing, gold is trading at around $1,595/oz, firmly in the center of its recent range.

Of course, the only practical way for most private investors to hold gold is through an ETF, and the $63billion SPDR Gold Trust ETF (NYSE: GLD) mirrored the fall in the spot gold price, closing down by 2% on the week on Thursday night. However, a London-listed alternative, ETFS Physical Gold (LSE: PHAU.L), regained some of its Thursday losses when it opened on Friday morning, suggesting that SPDR Gold Trust may rise slightly when U.S. markets open.

Are gold miners undervalued?
An alternative approach to investing directly in gold is to hold shares in gold miners, which many investors believe are undervalued at present. The only gold miner in the FTSE 100 is Randgold Resources (LSE: RRS.L), whose share price fell heavily in March when a coup in Mali put one of its mining operations at risk.

Since then, the situation has stabilized and Randgold's production has not been affected, but its share price has yet to fully recover, despite its Q1 results revealing a quarterly profit 126% higher than Q1 2011. What's more, Randgold is currently in the process of starting up production at a large new mine in the Democratic Republic of Congo. The new mine will be its sixth in Africa and should be producing gold by the end of next year.

Despite its profits, Randgold currently looks quite expensive, with a P/E of 21. A cheaper alternative is Egyptian-focused miner Centamin (LSE: CEY.L), which is listed on the FTSE 250. Centamin's share price has been hurt by the ongoing political problems in Egypt but it is profitable, growing and currently sits on a P/E ratio of just 5.9, suggesting that it may have the potential to outperform the price of gold.

This is a key point to remember for commodities investors -- shares in commodity companies have outperformed their underlying commodities many times over the last 10 years, thanks to their ability to magnify their gains through successful development of new resources. This free report from the Fool, "Ten Steps To Making A Million From The Market" contains some excellent tips on identifying and investing in potential multibagger shares, including resource shares like gold miners. I strongly recommend that you download it now, as it will only be available for a limited time.

Further investment opportunities