“Additionally, this is a classic example of buy-hold-sell research analysts finding themselves behind the curve. The key point here is that despite the positive catalysts listed above, the analyst consensus still expects gold miner earnings to decline this year. Anyone who is now buying the Miners clearly views the events as moving faster than analysts are able to react, and while they wait for clarity before revising their earnings projections the stock prices will go up a lot,” adds Azous.
It is also worth noting that production is not slowing even after two consecutive annual losses for GLD. On top of that gold miners, including those that make homes in GDX, have not been actively hedging production, indicating they believe a floor is in for gold prices.
“Gold miners are still not hedging their future production despite the recent price-drop to new 4.5-year lows, says the latest expert analysis, as zero interest rates and falling energy prices are deterring forward sales to lock in current prices,” reports Bullion Vault.
Market Vectors Gold Miners ETF
