Peruvian miner Buenaventura (Compania De Minas Buenaventura S.A.A.) (NYSE: BVN), with a market cap of USD 3.96 billion, is Peru’s largest publicly traded precious metals company.

While there are certainly a lot of Gold bulls screaming “Inflation” at the moment, it could in fact be the mining stocks rather than the commodity per se that are in for a positive adjustment heading into 2009. As one commentator on Seeking Alpha noted yesterday:

The XAU/Gold ratio is a measure of index of leading gold mining companies (XAU – Philly Gold and Silver Sector Index) relative to gold price. Over the past 25 years, the XAU/Gold ratio has been 0.25. That means the XAU index would be about ¼ the price of an ounce of gold.

On Monday (Dec. 8), the XAU closed at 94 while gold closed at $760 an ounce. This makes the XAU/Gold 0.124. That’s less than half the ratio’s long-run average and just off the 25-year lows.

The theory states that mining stocks got pushed down relative to bullion when the cost of oil spiked, but the market failed to readjust when the price of oil declined. Furthermore, gold stocks have tended to outperform in recessions. Finally, the artificially propped up dollar–due to quantitative easing and Asian largesse–is due to unwind. All of these factors together certainly point to gold stocks as being a tip-top stocking stuffer this season. Although coal stocks have taken a beating as well…

Last 5 posts by Jason G. Wulterkens

• Maturing debt markets anchor emerging economies’ resilience, V-shaped recovery - November 19th, 2009
• Abyaar net profit surge could spur sukuk - November 15th, 2009
• Growth, inflation creeping up as Egyptian equities shine - November 13th, 2009
• As urea goes, so does QAFCO, Industries Qatar - November 7th, 2009
• Competition, yield dilution may hamper Air Arabia in 2010 - November 1st, 2009