The chart above is the HUI to SPX ratio (GDX was not around until 2006) vs the price of gold on a weekly basis going back to mid-2000. It shows that the mining stocks are extraordinarily undervalued relative to the S&P 500 and gold. If reversion to the mean kicks in, either the mining stocks will experience a rally in order for that ratio to “catch up” to the price of gold. Or the price of gold is going to get demolished.
Given the fundamental back-drop supporting much higher gold prices, it’s a high probability proposition that the mining stocks, at some point, will experience a big move higher and will outperform the rest of the stock market.
Wall Street Silver invited me back on its podcast to discuss why the Fed’s current monetary policy will prime the pump for a big move in gold, silver and the mining stocks in 2022:
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Many of the junior exploration/development companies I cover, recommend and invest in have the potential to 5-10 baggers from their current down-trodden level. You can learn more about my newsletter here: Mining Stock Journal information. I do not take compensation of any type from mining companies and I have been doing my own research in the sector for over 20 years.