Skip to content
Subscriber Only

Gold Stocks Rally Seen on Gap to Global Shares: Chart of the Day

Edmond de Rothschild Group is taking a contrarian view on gold stocks, betting on a rally after valuations sank to the lowest since 1998 compared with global equities.

The CHART OF THE DAY shows the price-to-book ratios for the MSCI World Index of developed equities and the NYSE Arca Exchange Gold BUGS Index. The valuation gap widened over the past two years, with the average discount on gold shares this year the most since 1998, according to data compiled by Bloomberg. World shares traded at 2.1 times the value of net assets compared with 0.89 on the measure of companies involved in gold mining from Barrick Gold Corp. to Newmont Mining Corp.