Miners Remain Undervalued Despite Gold's Run
Gold had become overbought in the past month, trading well above trend, making it ripe for a correction. Once gold started to fall, momentum built as profit-taking set in and bullion exchange-traded products saw their first redemptions since June.Since gold broke out on June 20, 2019 into its current trend, the gold price has gained 45% and the NYSE Gold Miners Index 79%. However, this outperformance has not led to overvalued stocks.With higher gold prices, we will see lower-quality gold mines being built. These are deposits that were not economic at lower prices because they would have high operating costs and/or high capital costs due to low grades and/or mining challenges.
Seekingalpha · 09/09 11:44