- Gold miners are extremely cheap relative to the overall U.S. stock market and also cheap relative to the price of gold.
- Taken together, the current gold price suggests that the enterprise value of the GDX's underlying NYSE Arca Gold Miners Index should be almost double its current level.
- While this largely reflects the level of S&P 500 overvaluation, it nonetheless suggests the GDX will outperform.
- Furthermore, the bright outlook for gold prices should allow the GDX to perform well in absolute terms.
For further details see:
GDX: Gold Miners Priced To Dramatically Outperform