The HUI/gold ratio: gold price vs. Gold Miners Index

One ratio frequently used by analysts compares the performance of the NYSE Arca Gold BUGS Index with the gold price. The index, commonly abbreviated HUI, tracks the performance of the most important publicly traded gold mining companies that have not hedged against gold price fluctuations with forward sales. The HUI/gold ratio reveals the number of NYSE Arca Gold BUGS Index points needed to purchase one ounce of gold in US dollars. Experts use this ratio to identify trends in the gold market and to identify over- or undervaluations of companies or gold itself, and to identify buy signals if necessary. But how useful is the HUI/gold ratio for investors?

Sharp rise in the HUI/gold ratio during periods of recession

Shortly after the outbreak of the global COVID-19 pandemic, the HUI/gold ratio reached a value of 8.7, meaning that just under nine times the index points were needed to buy one ounce of gold. This shows that, despite their close connection with the ultimate crisis currency, gold mining company stocks behave in line with their asset class during economic downturns – unlike the product they mine. Today, in early July 2025, the ratio stands at 7.7 – also a very high level, which is due to the prolonged gold price rally and, in the opinion of some analysts, suggests that gold mining stocks might be undervalued.

The HUI/gold ratio alone is of little significance

As valuable as the ratio is for capital market experts, it is difficult for private investors in particular to use the information it contains for investment decisions. Too many factors influence the performance of gold, while gold mining companies are exposed not only to economic fluctuations, like any other company, but also to specific industry-related risks. The biggest of these are dependence on the gold price as well as the US currency, but also the lengthy, extremely costly exploration processes, which, despite state-of-the-art technology, still involve time and financial loss risks and can therefore weigh on the stock value. Analysts therefore always evaluate the HUI/gold ratio exclusively in relation to a wide variety of other indicators.