Mining equities offer massive leverage over physical metals
The guest argued that gold and silver mining equities are severely undervalued compared to the physical metals and are poised for dramatic outperformance.
The argument
Levy pointed out that major ETFs like GDX and SIL have lagged behind the physical metals year-to-date. He argued that as metal prices double, senior and junior producers have the operational leverage to quadruple or perform even better due to surging earnings.
The thesis, stress-tested
✓ What validates it
- ✓GDX and SIL beginning to significantly outpace spot gold and silver gains
- ✓Exploding quarterly earnings reports from senior producers like Agnico Eagle
▸ Risks discussed
- ▸Persistent equity underperformance relative to physical spot prices
- ▸Operational cost inflation eroding mining margins
Hear it yourself
"And and if gold and silver, and especially silver as you outlined, are are looking pretty good at these levels, the gold and silver mining stocks continue to look undervalued versus the metals. The SIL ETF outperforming silver by only around 12% to date."
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