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NEM - GDX: More Pain In Store For Beaten Down Gold Miners
Newmont Mining Corporation
2024-02-18 23:25:12 ET
Summary
VanEck Gold Miners ETF is trading at multi-year lows relative to gold, but this merely reflects the ongoing deterioration in the sector's fundamentals.
Declining profits and free cash flows, along with deteriorating balance sheets, are contributing to the sector's challenges, with dividends set to be slashed.
Weak fundamentals leave gold miners highly susceptible to falling gold prices, with previous cash crunches resulting in the GDX trading below book value, which is still 30% below current valuations.