Gold mining stocks are experiencing a remarkable resurgence after years of underperformance relative to the precious metal itself. The chart below portrays the monthly ratio of gold to the NYSE Arca Gold BUGS Index. This index is a modified equal dollar weighted index of companies involved in gold mining. BUGS stands for Basket of Unhedged Gold Stocks.

This ratio reached a value of 10.015 in February 2025 in February 2025, but was unable to break the all time high of 10.28 made in August 2015.The ratio is far away from the low made in 2003 of 1.70. It is currently trading at 6.35 and currently approaching oversold levels with the 14 period relative strength index at 33%. The falling 200 day moving average is at 8.20.
Whilst we see further potential for appreciation in gold stocks versus the gold price, expect a short term counter move towards the 7.50 area, where further accumulation of gold miners could be considered.
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