Most investors are zeroed in on the oil market right now, but don't let that distract you from what's taking place in the gold market.

The price of gold has risen roughly $300 an ounce off of its mid-March lows. While it's pulled back some since then, it's still at levels that indicate it could make a run at all-time highs.

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I wrote at the beginning of the year that gold miner stocks were one of my top picks for 2020.

Gold miner stocks - represented here by the VanEck Vectors Gold Miners ETF (GDX) and the VanEck Vectors Junior Gold Miners ETF (GDXJ) - don't necessarily move in lock-step with gold prices. Gold tends to be reflective of economic conditions, whereas gold miners trade based on company and industry specifics, such as profitability, cash flows, etc.

In the early part of 2020, gold miners didn't keep up with rising gold prices, but they're making up for it now.

Since the mid-March bottom, gold miners have risen more than 60%, making them one of the market's best-performing sectors during that time and a good diversifier for some of the many risks in the current markets.

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The junior gold miners have outperformed giving support to the notion that there's strength behind this move. Gold miners trailed gold early in the year because traders believed the rise in gold would be more of a temporary phenomenon based on short-term economic conditions.

Now that the coronavirus has effectively shuttered much of the global economy, traders are anticipating that miners will need to ramp up production to meet demand, which positively affects the bottom line.

It's important to note that gold isn't as much a defensive hedge as it is an uncorrelated asset hedge. It's moves independently of other asset prices, which makes it a great diversifier. It's also an inflation hedge, which is an underappreciated risk in the marketplace right now. With trillions of dollars of Fed stimulus being dumped into the economy, spending is likely to quickly pick up once life returns back to normal and that's inevitably going to force prices higher with all that cheap money available.

But if you look at the bigger picture year-to-date, gold miner stocks could have a long way yet to rise.

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The junior miners are up about 9% on the year, which is a solid gain, but the larger gold miners are still down 7%. They're still not even at the levels of a few months ago despite a $150 per ounce increase in the price of gold or economic conditions that have significant swung in the metal's favor.

I called for $1700 gold at the beginning of the year, but didn't suspect it would get there so quickly. Today, $1900 seems within reach with another 40-50% upside in gold miners.

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