Precious metal and other miners

All indexes

All indexes, annual change rates

Gold, BGMI, Dow, etc. - 1970-1982

Gold, BGMI, HUI, XAU seasonals

Gold & miner index ratios

Junior miner performance

Yield curve & the BGMI

Yield curve & the metals indexes

(BGMI = Barron's Gold Mining Index)

Gold, S&P 500, XAU, HUI & BGMI - annual change rates

BGMI data sourced from www.sharelynx.com. Full BGMI charts are also available from ShareLynx here.

Same as above, but longer term

BGMI data sourced from . Full BGMI charts are available from ShareLynx here.

Gold, S&P 500, XAU, HUI & BGMI

Same as above, but longer term

The yield curve, gold and the BGMI

Note that the yield curve right hand scale is inverted!
The point of these yield curve charts is simple. Mining shares strongly tend to out perform when the yield curve is going more positive (black line going lower on the two charts below).

Same as above, but long term

The yield curve, gold & the XAU, HUI & BGMI

The point of these yield curve charts is simple. Mining shares strongly tend to out perform when the yield curve is going more positive.

Same as above, but long term

Gold, BGMI, Dow - 1970-1982

Same as above, but adding in the dollar & yield curve (with scaling)

Gold, BGMI, HUI, XAU seasonal patterns - during bull markets and not

Calculations done based on changes since the beginning of each year, then averaged.

The Dow and S&P 500, for reference

Gold & it's ratio to the 3 miner indexes

Short term

Long term

Junior miner performance

Per the Financial Sense Junior Indexes 2006 review (2007 results here), there are 4 main classifications of junior miners - Overall, Producers, Development and Exploration. Based on the relationships since 2002, the juniors have outperformed the BGMI by about 3-3.5 times and the HUI by about 2-2.5 times (see 2002-6 data below to see how those multipliers are derived).

Transferring that performance back to the BGMI's 1970's bull market data and using the January 1980 high as the high point (the Dow/gold ratio high) and January 1970 as the start, and using London prices:

Physical gold went from $36.02 to $850.00, a gain of 2,260%.
Physical silver went from $1.84 to $48.00, a gain of 2,509%.
The BGMI (the best long term representation we have of all gold & metals mining stocks) went from 92.34 to 716.66, a gain of 676%.
Juniors miners gained an average 3.25x the BGMI, or 2,197%.
A 50/50 split of physical silver and gold returned 2,385%.
David Galland of Casey Research notes during the “last major inflationary period in the US, 1962 to 1982, gold shares rose, on average, 1,503%. This correlates well with the data above.

Using the January 1980 high as the high point (the Dow/gold ratio high) and January 1966 as the start (the Dow/gold ratio low), and using London prices:

Physical gold went from $35.13 to $850.00, a gain of 2,319%.
Physical silver went from $1.29 to $48.00, a gain of 3,621%.
The BGMI (the best long term representation we have of all gold & metals mining stocks) went from 98.64 to 716.66, a gain of 627% (note that the BGMI's later actual peak in Oct 1980 was about 1285).
Juniors miners gained an average 3.25x the BGMI, or 2,262%.
The Dow went from about 985 to about 870 during the period, for a loss of about 12%.
The S&P 500 went from about 93 to about 110 during the period, for a gain of about 18%.
The dollar index went from about 1.205 in 1971 (when dollar index records started being kept) to about .85 in January 1980.
In other words, in both scenarios physical gold and silver returned significantly better results than stocks - including juniors.

For another parallel - using the partial bull market high in late 1974 as the high point and January 1966 as the start (the Dow/gold ratio low), and using London prices:

Physical gold went from $35.13 to $183.72, a gain of 423%.
Physical silver went from $1.29 to $5.01, a gain of 288%.
The BGMI (the best long term representation we have of all gold & metals mining stocks) went from 98.64 to 458.79, a gain of 395%.
Juniors miners gained an average 3.25x the BGMI, or 1284%.
These relationships bear a very high similarity to the bull market since 2000-2, with the exception that gold was price controlled before 1966-1971 and had more catch up to do than silver.

2002-2007 performance

Overall	HUI	BGMI	XAU	Gold	Silver
1086.3%	569.1%	362.9%	175.6%	169.1%	243.0%

One year performance

Year	Overall	Producers	Development	Exploration	HUI	BGMI	XAU	Gold	Silver
2006	45.1%	41.2%	7.4%	118.5%	22.1%	16.5%	10.4%	24.6%	46.1%
2007	1.38%	6.76%	-22.94%	29.07%	40.48%	35.72%	36.06%	30.97%	14.66%

There are many ways to compare junior miners and calculate how they will or won't out perform other miners, and we have only shown one "best effort" example.
We also have excluded any very significant additional returns should one have used any leverage on the physical gold or silver markets, such as is available with futures or options, etc.

Finally, note that junior miners and precious metals and metals stocks in general are amongst the highest risk stocks available. Do your own due diligence and please read our disclaimer below!
Caveat emptor (let the buyer beware) - How to (still) get rich in mining.

Other juniors indexes and proxies

Financial Sense Junior Gold Index
Financial Sense Junior Gold Index Archive

Canadian Venture Composite Index (CDNX)

S&P/TSX Capped Diversified Metals and Mining Index

Gold Colony (no charts)

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