“Institutional investors see unusual opportunities in gold mining stocks. Some figure the gap between the prices of gold bullion and mining stocks is so wide that they can make profitable bets on that valuation gap narrowing. Others see improvements in management and operations of miners. A third group likes mining stocks simply because they hope to profit from the stocks’ volatility.  The essential thing to understand about gold mining stocks is that the price of the miner’s shares has fallen much faster than the price of gold itself. This has opened up a valuation gap between gold and bullion that has sent gold-seeking money managers away from holding gold and into the mining stocks.”

http://www.bloomberg.com/news/2014-01-09/how-the-big-guns-are-playing-gold-mining-stocks.html

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