Yet some mining executives say there is more to the story of why their share prices have lagged gold prices, according to the Dow Jones Newswires story.
“Mining costs surged, with some companies reporting massive cost overruns. Others made mistimed or overly expensive offers to buy competitors,” according to the report.
“I think the benefit that the ETF has had on the gold price outweighs the detriment it’s had in taking away investment dollars from the stocks,” said Charles Jeannes, chief executive of Goldcorp.
“Prior to the ETF, the gold[-mining] businesses didn’t have to be great businesses,” said Sean Boyd, chief executive of Agnico-Eagle Mines, in the article. “The shares would go up when gold went up. Now, that cover has been blown. Investors have options.” [The Outlook for Gold Miner ETFs]
Market Vectors Gold Miners ETF
Full disclosure: Tom Lydon’s clients own GLD and GDXJ.