From Claude Erb, who argues:
- The price of gold reflects the supply and demand of already mined gold
- The value of a gold miner reflects the present value of yet-to-be-mined gold
- If these two ideas are accurate, then the price of gold will eventually follow the price of gold mining stocks rather than vice versa. After all, if the price of gold mining stocks tells us the present value of gold in the future, then we should expect the price of gold to follow the value of gold mining companies.
I don’t know who Claude Erb is, but he won’t be endearing himself to gold bugs. He was saying similar things in 2012.
The research paper is here.
Forbes have an article on it here.