Gold Far From Real Record High

• By the tickerspy.com Staff
• On 10:07 am EDT, Monday October 19, 2009

Gold's four-digit price tag is less than half the inflation-adjusted high it hit almost 30 years ago.

According to Bloomberg, gold's all-time, inflation-adjusted high was reached in 1980 when the metal reached $873, or $2,287 based on today's dollar. Since then, the metal has underperformed various consumer goods including bread and fuel, the report adds. Continued dollar weakness and bullish options activity have some analysts betting on a gold rush towards the real record high.

Meanwhile, mining stocks are getting pricy from a P/E perspective. However, a strong earnings season for the industry could lower the lofty multiples.

The Gold and Silver Stocks Index has appreciated by 6% over the last month. Top performers have earned investors over 20% for the period, and if the gold rally continues, there could be more room to the upside.

The largest gold miners will report earnings in late-October, early-November. Barrick Gold (NYSE: ABX - News) is expected to report 47 cents in EPS before the bell on October 29th. Multibillion-dollar peers Anglogold Ashanti (NYSE: AU - News) and Goldcorp (NYSE: GG - News) report their numbers in the first week of November. Analysts are expecting 23 cents and 16 cents of EPS, respectively.

Despite gold's recent run, Toronto-based miners Seabridge Gold (AMEX: SA - News) and IAMGOLD (NYSE: IAG - News) are both in negative territory over the last month. Their performance has also weighed on the Canadian Mining Stocks Index, which is outperforming the S&P 500 by 5% over the last month.

Silver stocks have outperformed many of their precious-metal mining peers recently. Silvercorp Metals (AMEX: SVM - News) and Mag Silver (AMEX: MVG - News) are up by more than 25% for the period. Silver Wheaton (NYSE: SLW - News) is also up by double-digits in the last month, while Pan American Silver (NASDAQ: PAAS - News) remains a laggard.

As of this writing, the Gold and Silver Stocks Index has one of the 15 most expensive tickerspy Indexes by P/E ratio, with a multiple of 43.5x.

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