Newtrader

I believe that most of the stock was being ramped up by speculators and that the prices were too high now that the price have dropped I am in the market and I believe that the juniors will start to move slowly and then gather momentum now

Why Are Junior Miners Underperforming?, Will This Change? : chart/added

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Many here and eslewhere have been deeply frustrated watching the gold price rise while their junior miners decline or stagnate. Even producers such as Capital Gold are trading at a discount to where they were when gold was $700. This company has done nothing but get into production quickly. Explorers and developers have been proper dogs, even though the underlying asset has flown. We have seen a 40% rise in gold and barely a move in juniors, in fact declines in some.

 

Why is this?

 

Were they overvalued before? I don't think so.

 

Is it because the market doesn't believe the move?

 

Is it because nobody wants to take any risk?

 

Even some senior producers have lagged.

 

Please post some suggestions as to why this has happened - and some arguments as to whether this will change or not.

 

My first suggestion is the ETF. Why take individual company risk? Why even bother doing any research when you can just buy GDX or GLD? If you want leverage, you can just trade options on said ETF. I think the ETFs have taken huge amounts of capital that would otherwise have gone into juniors - capital that pushed them higher in previous moves when the GDX didn't exist.