It is interesting to note that major gold mining stocks for the most part have more than comfortably outperformed a basket of gold mining juniors like the GDXJ gold ETF. Barrick Gold (ABX) in particular performed spectacularly up 90%, this somewhat contrary to normal theory which might suggest that juniors comfortably outperform gold majors at a time of rising gold prices.
My view is that the main reason for the spectacular performances of some (most) of the majors is rebuilding of gold stock positions by funds which had virtually sold out of gold stocks over the prior three years. they just didn’t want to be left behind in the recent gold price surge. It is also apparent that in a time of rising gold prices, gold mining stocks hugely outperform the metal itself and its proxies like the gold ETFs.
To read more of my analysis on this click on GDXJ And The Gold Mining Majors – Where To Now? which is published on the Seeking Alpha website.
