GDX - VanEck Gold Miners ETF
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Sean K
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Gold weekly ATHs you'd think GDX will have to catch up at some stage. Inflation costs and general sentiment is holding individual stocks back I guess, but I'm not sure if they warrant such a disparity to the actual product.
Sean K
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There's still a slight anomaly between the GDX and Gold with the GDX lagging. I actually thought gold miners led gold, but not in this case. Maybe GDX is telling us the gold has gone too far? Or, GDX should be at $60 ish.
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@Sean K thanks for your post comparing these two markets, I wanted to reproduce your charts making them bigger to have a closer look. They do mostly turn together and track in the same direction but if you put the same moving average on both charts you can see that GLD is definitely the stronger market.
Sean K
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GDX is lagging way behind price of US gold and way way behind Australian gold. Also lagging behind the general markets as well with XAO near ATHs. I'm not sure if the GDX naturally has to catch up with the markets and gold, or what. There's a disconnect one way or the other.
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Comparison of the two markets since the December 2015 low;
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Comparison of the two markets since the August 2020 high;
Sean K
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Was looking at the performance of GDX vs the price of gold and man it was TERRIBLE.
OCTOBER
GDX: 42 AU$
Gold: 1800 US$
FEBRUARY
GDX: 42 AU$
Gold: 2020 US$
1. explain the downperformance
2. will this trend continue? yes/no and why
OCTOBER
GDX: 42 AU$
Gold: 1800 US$
FEBRUARY
GDX: 42 AU$
Gold: 2020 US$
1. explain the downperformance
2. will this trend continue? yes/no and why
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Absolutely agree, I own poth and the performance or absence of, is stunning
Sure production might be edged, and cost increased but surely, new hedges will be higher and there are plenty of sacked miners available
Sean K
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Our of favour. No love. Historic holdings of gold and gold equities have been about 2% of the market but are currently 0.25%. Only has to revert to mean for a 4 x increase in interest/holdings which will obviously effect the GDX and GDXJ. Not a matter of if but when. Death, taxes, gold will go up.
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It is a shame we see such underperformance of GDX vs gold as things short term don't look to bright for gold either, with the outflow from gold etfs to the new bitcoin (and soon ethereum) one
Garpal Gumnut
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An interesting ETF about which I am ignorant. The charts do tell a tale.
The top chart is a 3 year and compares GDX ETF to a/ PMGOLD as a proxy for the POG in $AUD and b/ GOR as a proxy for the average gold mining stock. GDX is down 3% whereas Gold is up and GOR is up though falling since December
So buying gold as PMGOLD 3 years ago would have given you a 40% profit today. Equally GOR a 20% profit. Unfortunately GDX would have shown a loss at 0.3%. I'm not up with how much skinny the ETF makers shave off that for the pleasure of having done nothing for 3 years, so the loss may approach 5% I'm guessing.
The next chart is just GDX, again a 3 year but with large support and resistance lines at $35 and $55.
I guess one strategy would be to buy GDX at $35 and sell at $55 , if that pattern repeats which would give a profit of 60%. This requires luck and a belief in a higher power.
All in all a sad look at GDX. If I were having a big bet I'd steer clear, or would I?
gg
The top chart is a 3 year and compares GDX ETF to a/ PMGOLD as a proxy for the POG in $AUD and b/ GOR as a proxy for the average gold mining stock. GDX is down 3% whereas Gold is up and GOR is up though falling since December
So buying gold as PMGOLD 3 years ago would have given you a 40% profit today. Equally GOR a 20% profit. Unfortunately GDX would have shown a loss at 0.3%. I'm not up with how much skinny the ETF makers shave off that for the pleasure of having done nothing for 3 years, so the loss may approach 5% I'm guessing.
The next chart is just GDX, again a 3 year but with large support and resistance lines at $35 and $55.
I guess one strategy would be to buy GDX at $35 and sell at $55 , if that pattern repeats which would give a profit of 60%. This requires luck and a belief in a higher power.
All in all a sad look at GDX. If I were having a big bet I'd steer clear, or would I?
gg
Sean K
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It is looking generally sad. There's been a few individual stocks in the space that have gone OK but generally a poor performance.
I'm still about 30% gold and gold stocks waiting patiently. If precious metal allocation gets back to half the last 40 year mean it all should double. I might be waiting for a while...
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The question is whether the underperformance reflects how the basket of companies that make this etf went vs gold.I like this ETF as it is safer than a gold etf (you are buying part of companies, as opposed to paper gold), the idea is getting exposure to gold.
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In handsight, what a bottom that was. Now long and strong with chinamoney and cryptomoney flowing in.
Sean K
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Has the GDX finally woken up?
POG testing $2400 now.
POG testing $2400 now.
