Gold miners are less unloved today than they were a year ago as highlighted by the $1 billion that has flowed into the Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) this year. In addition to the aforementioned technical, miners look appealing at the fundamental level. [Miners Keep Beating Gold ETFs]
“With gold mining stocks trading at a 58% discount to 2011 levels, gold miners’ shares remain highly undervalued relative to fundamentals in our view. Although reserve depletion is an issue that still needs to be addressed for sustainable long-term growth of the sector, cost management has substantially improved miners’ profitability. With global growth finally starting to gain momentum and seasonality of gold demand historically buoying gold miners’ shares in the third quarter, we believe now may be a good time to raise exposure to gold miners. We maintain our positive view on gold miners and target broad miner valuations to move back to around 2x book value over the next few months,” said ETF Securities in a new research note out Wednesday.
Market Vectors Gold Miners ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GLD.