Are Shares Of Gold Miners A Steal At These Levels?

FRANKFURT - Gold has hit a fresh record high today of over $1,719 an ounce, its 11th record high in the last 19 trading sessions. Shares of most unhedged gold miners, however, are far from their all-time highs and well below their 52-week highs. Barrick Gold

, for example, though up nearly 5% today, would still have to rise over 15% to approach its 52-week high. Barrick, the biggest gold miner in the world, is actually down approximately 10% year-to-date. This is at odds with SPDR Gold Trust

, the gold trust that seeks to replicate the price of gold, which is up nearly 20% year-to-date. The Amex Gold BUGS Index, also known as the HUI Index and listed on the American Stock exchange, is well off its 52-week high as well. The HUI index tracks 15 of the largest and most widely held unhedged public gold miners. Barrick is the largest component of the index, and a close second in the index is Goldcorp

, another unhedged miner that has risen over 5% today but again, is also well off its highs. Another favorite unhedged miner, Agnico-Eagle Mines

, is off by nearly 23% year-to-date, and once more, that is after rising over 5% today. An investor could do very well buying unhedged miners if they believe gold will continue setting records. As Reuters has

, Dominic Schneider, an analyst at UBS Wealth Management, said today that UBS had increased its price target to $1,800, adding, "but I would say the way things evolve right now I really could even imagine $2,000 being in the cards. The chances have increased that we'll reach $2,000--the forecast remains 12-month $1,800, but the risk is that we will actually hit towards $2,000." If miners play catch up, they could easily outperform gold in the months ahead. Traders who believe that gold and unhedged gold miners will go higher might want to consider the following trades:

Traders who believe that gold will drop sharply after this spike may consider these alternate positions: