Can Miners Outperform Gold Despite Twist?
Michael A. Gayed | Jun 24, 2012 01:23AM ET
“If you limit your choices only to what seems possible or reasonable, you disconnect yourself from what you truly want, and all that is left is compromise.” - Robert Fritz
I’ve addressed the performance of Gold Miners a few times here on Investing.com, noting that 1) Gold (GLD) has significantly outperformed mining stocks which in theory should simply be a leveraged play on future gold prices, and that 2) the extent of underperformance relative to Gold could cause miners to rally faster on a mean reversion trade. In the May 28th article titled “as I noted on CNBC. This may have caused a short-term period of weakness in Gold Miners. However, I maintain that there is more potential to run in Miners relative to Gold itself given how severely it underperformed since early 2011. This coming week should provide clarity, and I suspect that a comeback could re-assert the trend in outperformance for a longer time period.
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