Gold miners have high fixed costs (digging the hole, processing plant, labor). When the price of gold goes up, the additional revenue from the higher price flows almost entirely to the profit line.
As gold prices rise, profits grow exponentially faster than the share price, causing the P/E ratio (P/E = {Price} / \{Earnings}) to shrink or contract.
Investors who believe the high gold price is sustainable view this low P/E as an opportunity for the stock price to "catch up" to the earnings power.
