While gold (GCZ25) is usually seen as a defensive asset and investors don’t really expect it to keep outperforming risk assets like equities over the long term, things have been different over the last few years. The precious metal is outperforming the S&P 500 Index ($SPX) this year, something it has also done over the last two-year and three-year periods.
Gold miners are a leveraged bet on gold as they tend to rise or fall more than the precious metal. We see something similar with other commodity producers, given their earnings sensitivity to the underlying commodity.
