Should I invest in miners or their commodities?

Should investors hold equity in miners or should they hold the physical commodity in their portfolios? This may sound like a moot point, but it is currently quite pertinent. If you held an ounce of gold for a hundred years, you would still just have an ounce of gold. If however you held Anglo American plc shares for a hundred years, you would have a number of other unbundled shares and a steady flow of dividends as the group diversified into new commodities and new territories.

So who wins? Miners or their commodities? Let’s not guess, let’s inspect some of the facts … Two very different pictures start to emerge, as gold miners still lag their own commodity while platinum miners are comfortably outperforming theirs. As South African gold deposits get deeper it gets more expensive to mine them, which makes gold mining more susceptible to inflation.

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