Gold stocks and related exchange traded funds lagged behind bullion prices for several years, but that trend is reversing in 2014. Along with price fluctuations, gold producers have to account for other costs and factors, including risks in the host country of their mining operations.

Country risk is one of the most pressing problems gold miners like Newmont Mining (NYSE: NEM), Goldcorp (NYSE: GG) and Barrick Gold (NYSE: ABX) have to manage, reports Ben Levisohn for Barron’s. [Production Cuts Not a Bad Thing for Gold Miners]

For example, Indonesia is telling Newmont to refine the gold mined there in the country. Newmont has gained 6.7% year-to-date, whereas gold prices and the SPDR Gold Shares (NYSEArca: GLD) rose about 11%.

Meanwhile, the broader gold miner ETFs, Market Vectors Gold Miners ETF (NYSEArca: GDX) and Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ), have gained 25.4% and 37.3% year-to-date, respectively.

JPMorgan analysts, though, believe that country risk in other parts of the globe are improving.

“The Fraser Institute in Canada polls mining industry participants on the conditions they are seeing in 112 countries and regions, and compiles data into a format that we find useful to compare risk within the mining sector,” JPMorgan’s John Bridges said in the article. “The average Fraser PPI score improved for our coverage companies. Weighted average of scores using regional NPVs at 5% discount improved 9% over the last survey for our gold companies.”

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