The divergence between the bullion price and gold miners’ stocks “does not appear to be justified by deterioration in the fundamentals or in the underlying value of their shares,” ETF Securities said in a 2011 report.
GDX, the gold miner ETF, is trading near a 52-week low.
“Why should you be looking at mining stocks when you have geopolitical risks, labor problems and rising-cost issues?” said Donald Selkin at National Securities Corp. in a recent report. “I would prefer owning gold and exchange traded funds as I do not have to worry about anything else beside prices.”
Market Vectors Gold Miners ETF
Full disclosure: Tom Lydon’s clients own GLD.