Is the bearish sentiment against gold miners warranted?
By Alena Mikhan, Casey Metals Team Researcher, and Andrey Dashkov, Research Analyst
Disenchanted with gold's lackadaisical performance over the last year, some investors are losing interest in the equities that are supposed to provide leverage to the metal's price movements. The press has added fuel to the fire by increasingly attacking gold-mining CEOs for rising production costs and weak stock prices. This has driven some investors to pursue ETFs or other vehicles as a replacement for gold stocks, while others have simply thrown their hands up and left the precious-metals space. Is this overreaction or rational decision-making?
In this article, we set out to objectively evaluate how gold-mining majors have been performing operationally in the current commodity bull market that started roughly at the beginning of 2002. We compare them against the S&P 500 – the mainstream "blue chip" index – to see if gold miners deserve the beating they've received. We also look at what may lie ahead for one of our favorite subsectors of the gold universe. ...