Gold was up for an 11th straight year, a remarkable run. But most gold stocks have performed poorly for several years. Throughout the past five years, the price of gold has more than doubled, while the XAU index of major gold stocks is essentially flat. Yet mining stocks are supposed to be leveraged investments on gold, and they once behaved as such. During the first five years of the latest gold bull market, gold stocks rose sevenfold while bullion "only" doubled. What went wrong?

There are several reasons why gold stocks have underperformed:

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