Gold miners, the companies which extract the element from the Earth which has served as the backbone of the global economic system since the dawn of civilization, remain historically undervalued across two key metrics that are used to value the sector. Opportunity for profit exists for those with patience for the sector to revert to the mean.

First, gold companies are undervalued versus the broader US economy: a ratio of gold mining versus the S&P500 index is at its lowest valuation of all time. Secondly and perhaps more interestingly, gold miners remain undervalued relative to the price of the actual metal they produce: gold itself.

As contrarians, these are statistics we should pay attention to. Let us examine the charts.

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