Mining and exploration companies make up a significant part of the resource sector. And while there are projects focused on a wide range of base and precious metals, investors are no doubt aware that a substantial portion of miners choose to focus on gold. That leaves gold bugs spoiled for choice when it comes to investing in mining companies. In some ways that's good, but it can be difficult to wade through all of the information available while also keeping an eye on the gold market overall. Analyst recommendations can help investors gain a fuller picture of the state of broad or specific markets and can inform their next steps; accordingly, it is helpful for gold investors to understand analyst recommendations. However, such recommendations usually take the form of a single word, according to the Financial Industry Regulatory Authority (FINRA). They are based on serious, in-depth research, and have a huge impact on the flow of capital. They are not useless, but they do require a certain amount of understanding if they are to be used to create true value. What do analysts do? Before going over how to use analyst recommendations, it's useful to learn what they do. According to the US Bureau of Labor Statistics, analysts recommend individual investments and portfolios by evaluating a set of current and historical data on the investments in question. They also study the economy and business trends closely, ensuring that they understand the broader shape of the market. Furthermore, analysts devote quite a lot of time to examining a company's financial statements. They do that to determine its value and performance, and often meet with company officials to get further insight into what they have learned. Finally, analysts prepare written reports and make recommendations to investors. Some analysts will also meet with investors to explain their recommendations more fully.