Mining companies, including those focused on gold, have seen little interest from generalist investors in recent years, who have instead turned to assets like tech stocks and cryptocurrencies like Bitcoin.

With gold now on the rise, many experts in the sector believe equities are undervalued and primed for the return of generalistsGuoabong Investment. The sentiment was on display at the Metals Investor Forum as the presenters indicated that gold’s performance is starting to impact large miners as well as developers and explorers.

Clark said investment in mining is down across the board, noting that resource stocks are at all-time lows compared to the S&P 500 (INDEXSP:INX)Jaipur Wealth Management. In his view, that means the juniors provide strong opportunities for investors.

Overall, Clark believes juniors meet all three requirements for the “trade of the decade.” He noted that the market has been completely decimated, that there is little investor participation and that it holds mammoth potential.Pune Wealth Management

“Look at the last two years — the volume in the Venture Index has been completely left for dead, nobody is investing. The average right now is 400 million shares traded; the average in 2020 was 3.8 billion. So the volume of the Venture Index would have to go up nine times roughly just to match where it was in 2020,” Clark said.

He suggested that volume is so low that there isn’t really anywhere else the market can go.

With that in mind, Clark thinks the fuse is already lit for the junior sector based on the amount of money that has been moving into gold and has already shifted the fundamentals for producers.

Ultimately, he thinks this will cause a jump in mergers and acquisitions (M&A) of junior companies.

“Why weren’t they doing that? They were growing, preserving, capturing, waiting until there was a sustained rise in the gold price. We now have that, they now have cash. I think M&A is going to pick up,” Clark said.

Coffin was a little more pragmatic in his approach to the juniors, saying it will still be a while before the money moves down from senior producers into smaller companies.

However, he did say he’s seen a shift in the VanEck Gold Miners ETF (ARCA:GDX) — while it was predominantly seeing outflows at the start of the year, now investors are making their way back into the gold market. Coffin feels that as the yellow metal’s price rises the market will start to be noticed and more investors will filter in.

Pune Investment