(GRAPHIC: COD_GOLD_MINERS_VS_METAL_121912. CHART OF THE DAY. Size: 3C X 4in. (146.0 mm X 101.6 mm) Available now.)

Dec. 19 (Bloomberg) -- Shares of gold-mining companies have become a relatively cheap alternative to buying the metal they produce, according to Jack Ablin, chief investment officer at BMO Private Bank.

The CHART OF THE DAY displays the ratio of the NYSE Arca Gold Miners Index to the price of gold in New York trading on a monthly basis since September 1993, when the industry gauge was created. Ablin, based in Chicago, highlighted a similar chart yesterday in a research note.

Yesterday’s ratio was 0.75, close to this year’s low of 0.70 on May 15. The earlier figure was the lowest since November 2008, when a financial crisis tied to the U.S. housing market’s collapse sent stocks and gold tumbling.

“Gauging the right price for gold is a psychological marathon,” Ablin wrote, because demand goes beyond industrial companies. “The miners appear to be one defensive way to play the precious metal.”

Jewelers and technology-component makers were responsible for 51 percent of demand last quarter, according to data from the World Gold Council. Gold bar and coin producers, exchange- traded funds and central banks accounted for the rest.

The NYSE Arca index has lost 12 percent this year after falling 16 percent in 2011. It’s poised to drop in consecutive years for the first time since a three-year losing streak ended in 1998. Gold is 6.6 percent higher this year and is headed for its 12th straight annual gain.

--Editors: Jeff Sutherland, Michael P. Regan

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

To contact the editor responsible for this story: Chris Nagi at chrisnagi@bloomberg.net

-0- Dec/19/2012 17:21 GMT