Gold Rush 2025! Are Gold Mining Stocks the New Lost City of Gold?

Another Adventure Begins!

Right where to begin? It seems the world of finance is getting as exciting as raiding a lost tomb – and about as perilous if you ask me. Apparently these 'gold mining stocks,' which have been gathering dust longer than some of my artifacts are suddenly the 'it' thing. All because gold that shiny metal we sometimes find in ancient temples is hitting all time highs. As they say 'what's worth doing is worth doing for money,' or was that someone else? I can't remember.

GDX Marks the Spot!

The VanEck Gold Miners ETF (GDX) is apparently the map to this treasure having surged 48% this year alone. Good for them! Makes you wonder if they found some hidden shortcuts or maybe a secret passage behind a waterfall? If only uncovering ancient cities was this easy! This month alone the ETF is up 9% a sign that much like a well placed trap things are about to get interesting. Gold futures have reached an all time high of $3,509.90. Blimey!

Miners vs. Metal: The Great Debate

Now the clever clogs over at Oppenheimer led by Ari Wald are saying gold miners might be a better bet than the actual gold. Apparently these stocks have been lagging since 2006 but now they're ready to 'inflect higher.' Sounds a bit like navigating a treacherous mountain pass doesn’t it? Wald expects both gold miners and the commodity to be overbought over the near term but expects any dips in gold mining stocks will be bought as the trend is to the upside “over the coming quarters perhaps even the coming years.” The GDX could even top its 2011 peak. Oh the drama!

Catching Up: A Miner's Tale

JC O'Hara from Roth MKM echoes this sentiment calling gold miners his No.1 industry group. Finally they're catching up like a trusty sidekick who's been given a rocket launcher. He notes that GDX has broken out from a multi year base pattern while gold (GLD) already did so last year. Better late than never I always say. 'It's not the years honey it's the mileage,' right?

Dirt Cheap and Dangerous?

Investors usually go for gold backed ETFs like SPDR Gold Trust (GLD) and iShares Gold Trust (IAU) – the easy way to hoard gold without the hassle of storage. But gold mining companies with all their 'operational risks,' have charms of their own. They're cheap for starters. Newmont the biggest gold miner is trading at a bargain compared to its past. Chris Mancini at Gabelli Gold Fund (GOLDX) says they're 'way too cheap' if gold prices stay put. Plus they pay dividends a bonus in these topsy turvy times. It is nice being rewarded isn't it? Perhaps I should start charging double for my adventures.

Charting the Course: Who's Worth the Risk?

When it comes to individual miners Oppenheimer's Wald prefers those that have already surpassed their 2011 peak such as Agnico Eagle Mines and Franco Nevada. Roth MKM's O'Hara likes B2Gold and Coeur Mining. As for me I'll stick to raiding tombs. Though I must admit a little investment diversification never hurt anyone. Who knows? Maybe I'll find a lost mine on my next adventure. Now where's my grappling hook? Time to dig a little deeper!