As gold prices touch the $4,000 mark, economist Peter Schiff said that investor behavior is not in alignment with this trend when it comes to gold mining stocks.
Most ‘Gold Mining Stocks’ Are Down
On Tuesday, in a post on X, Schiff highlighted the disconnect between the rising price of gold and the performance of gold mining stocks. “Gold is at a new record high, trading above $3,985,” he said, adding that despite being just $15 away from $4,000 mark, gold mining stocks remain unmoved.
In the hours since this was posted, gold spot prices have surged past $4,000, currently trading at $4,011.5 per ounce on Wednesday.
Despite this, “most gold mining stocks are down,” Schiff said, referring to their performance over the past week, while attributing this underperformance, relative to the commodity itself, to “nervous investors” who take profits too soon.
Schiff called this “the most unloved gold bull market in history,” which he said “continues to defy the FUD,” referring to fear, uncertainty, and doubt that often clouds investor sentiment in volatile markets. He concludes by asking investors to “buy miners and HODL,” which stands for Hold On For Dear Life.
Miners Set To Post Highest Profit Margins
Macro Strategist Otavio Costa of Crescat Capital echoes Schiff’s views, saying that despite the rally in gold and some miners gaining nearly 200% year-to-date, their price-to-earnings ratios have contracted.
He said that if gold prices continue to remain elevated, miners are positioned to post their highest-ever profit margins, which he said will further sweeten their investment profiles.
Gold mining stocks have broadly trailed spot gold, which is up 4.01% over the past week, with some even declining during this period.
Gold prices surged higher on Tuesday, surpassing the $4,000 per ounce mark, and are currently trading up 0.63%, at $4,011.50 per ounce. The SPDR Gold Trust (NYSE:GLD), which tracks the price of gold, was up 0.52% on Tuesday, closing at $366.26, and is up 49.24% year-to-date.
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