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(Source: TC2000.com)
Many investors prefer to play the gold price with the GLD or the Gold Miners Index, and while this approach made a ton of sense in 2011 – 2018 when margins were low, and few miners paid dividends or bought back shares, it makes much less sense now. This is because the average producer million-ounce gold producer is paying a dividend yield of more than 2.70%, double that of the S&P-500 (SPY). So, with investors being paid to wait, holding miners looks to be a better strategy, especially because valuations support meaningful upside in the sector. This is because the average producer is trading at a discount to net asset value, which we have not seen since March 2020, and early 2019. For those unfamiliar, the average gold producer gained more than 40% over the next nine months in both instances, and I would not rule out a similar upside over the next year or a trade back to $40.00 on the GDX. Let’s take a look at three names that are trading at deep discounts to their peers, which include Kinross Gold (KGC), Royal Gold (RGLD), and SSR Mining (SSRM).
