However, Q4 has been much better thus far for precious metals bulls, with the bulls staging a 14% rally thus far in the GDX, reversing nearly all the losses from Q3 when the gold price slid below $1,700/oz.
While the miners are up more than 10% off their recent lows, it’s worth noting that the sector remains the cheapest that it’s been in several years, and this suggests that further weakness should present a low risk buying opportunity. In this update, we’ll look at three miners trading at deep discounts to fair value, and their ideal buy points for the best reward/risk proposition:
With inflation readings continuing to remain elevated and negative real rates deeply in negative territory, one sector that doesn’t receive nearly enough love is the Gold Miners Index.
For those unfamiliar, the ETF is full of gold producers, silver producers, and royalty/streaming companies exposed to the gold and silver price. This disgust towards the sector is especially surprising given that the GDX is trading at its 2nd cheapest level in the past decade.
However, as the market goes, most investors and traders are interested in what’s hot now, not what’s offering the best value and may come back in favor next year.