Some analysts believe the underperformance of gold miners is due to the rising popularity of bullion-backed ETFs, which make it easier to invest in the precious metal. The theory is that gold ETFs have diverted money away from miner stocks. [Gold Miner ETFs Lose Their Luster]

“Market sentiment is overwhelmingly bearish on both gold and the miners (the miners are even more hated than the yellow metal itself),” writes Robert Sinn at the Stock Sage blog on Thursday.

“The mining industry has suffered from an industry wide round of cost inflation which has led to margin compression and disappointing earnings results even during a time of robust gold prices,” he added. “It seems to me that this sector is nearing a major inflection point as the institutional investors have largely fled the scene and some of the last stragglers are being carried out feet first as we speak.”

Market Vectors Gold Miners


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