It’s been a tough year for investors in the Gold Miners Index (GDX), with the ETF sliding more than 10% year-to-date and massively underperforming the S&P-500 (SPY). The most frustrating thing about this underperformance is that it’s despite inflation readings that have hit new multi-decade highs and negative real rates that are sitting near multi-decade lows.
The good news is that this massive divergence between where gold (GLD) should be trading and the fundamental backdrop has led to a significant decline in gold miners, leaving them at their most attractive valuations since March 2020. In this update, we’ll look at three that look like solid buy-the-dip candidates:
Barrick Gold (GOLD), Hecla Mining (HL), and Eldorado Gold (EGO) have little in common, with one being the world’s 2nd largest gold producer, another being a ~500,000-ounce gold producer, and the third being the only primary silver miner focused on solely Tier-1 jurisdictions.
However, the three do share one common trait: they’re all sitting near oversold levels heading into 2022. In Barrick’s case, the stock is trying to find support at a multi-year trend line, while both Hecla and Eldorado Gold are trading in the lower portion of their trading ranges after giving up significant ground over the past year. Let’s take a closer look…