Miners vs Metal

Help I'm steppin' into the twilight zone
The place is a madhouse
Feels like being cloned
--Golden Earring

During the recent run in gold, mining shares have been outperforming the metal. How long has it been since such outperformance has been secular (long term) rather than short term?

A while. A decade, in fact.

Some attribute miner underperformance to the onset of ETFs such as GLD that now offer investors direct exposure to the precious metal itself. Investors have consequently dumped the miners, a notoriously difficult business, for the 'safer' metal, so the theory goes.

There is likely some truth there. But there is also the classic risk:reward tradeoff, and miners represent leveraged plays on gold. If the selling has been overdone, then perhaps a secular trend favoring the miners is in the works.

position in gold, miners