Erb: Gold Could Fall 50% Or Gold Miners Could Rise 100%

Claude B. Erb, managing director at First Chicago NBD, published a research report titled “A Golden Bet: Gold Mining Equities versus Gold” earlier this week. Erb takes an in-depth look at the factors behind the price of gold and the relationship between gold prices and the prices of gold mining equities. His conclusion is that if you believe in the relationship between gold and inflation, then gold is overvalued and gold mining stocks are generally undervalued. Poor performance of gold mining stocks The first leg of Erb’s analysis focuses on the “horrible performance” of gold equities relative to spot gold…