Despite a banner year for bullion, with gold soaring roughly 26% year-to-date to around $3,310 an ounce, shares of gold mining companies have failed to keep pace.
While the VanEck Gold Miners ETF (GDX) has climbed 43%, analysts at Jefferies argue this understates how undervalued the sector remains—especially intermediate producers.
Jefferies’ models suggest the average gold miner is pricing in a long-term gold price of just $2,557 per ounce—nearly 23% below current spot levels.
That gap implies a significant disconnect between the price of gold and the valuation of those who produce it. The average price-to-net-asset-value (P/NAV) multiple for the firms under Jefferies’ coverage stands at 0.6x, which the analysts point out is “40% below historical averages.” In short: “We still see an attractive entry point for gold equities.”
Among their top picks are Barrick Gold Corp. (TSX:ABX, NYSE:GOLD), Endeavour Mining…
