Market Overview

The SPDR Gold Trust Just Hit A 5-Month High

The SPDR Gold Trust Just Hit A 5-Month High
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The rally in precious metals and related stocks continues to push higher as the SPDR Gold Trust (NYSE: GLD) hits a new five-month high. The initial rally was spurred by oversold technical levels, but the last few weeks the fuel has been moves by central banks around the globe. On Wednesday, Canada was the latest country to surprise the markets with an interest rate move. Next up is the European Central Bank.

Even though the moves have hurt the value of the local currencies and helped push the U.S. Dollar Index to multi-year highs, gold has been viewed as an alternative. Typically, the U.S. dollar and gold move in inverse relationships, but this time may be different.

Related Link: Why Shares Of Eldorado Gold Crashed On Wednesday

Moving with the price of the hard commodities are the mine workers. After being beaten up for the last few years, the ETFs that track miners appear ready to end the multi-year downtrend.

Highlighted below are a number of mining ETFs that have experienced a rally over the last couple months.

Market Vectors Gold Miners

The Market Vectors Gold Miners ETF (NYSE: GDX) follows 38 small-, mid- and large-cap companies around the world that are primarily involved in gold mining.

The top holdings include:

  • Goldcorp Inc. (USA) (NYSE: GG) at 9.9 percent
  • Barrick Gold Corporation (USA) (NYSE: ABX) making up 7.5 percent of the ETF
  • Newmont Mining Corp (NYSE: NEM) coming in at 6.1 percent

GDX is down 6 percent over the last 12 months, but is higher by 35 percent since the low last November. The ETF has an expense ratio of 0.53 percent.

Market Vectors Junior Gold Miners

The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) is made up of 69 small and medium companies in the gold and silver mining industry.

The top holdings include:

  • IAMGOLD Corp (USA) (NYSE: IAG) at 5.3 percent
  • Centamin Egypt Ltd with a 4.9 percent holding
  • Hecla Mining Company (NYSE: HL) coming in at 3.7 percent

GDXJ is down 23 percent over the last 12 months and since the bottom in mid-December the ETF is up 36 percent. The ETF has an expense ratio of 0.57 percent.

iShares MSCI Global Gold Miners

The iShares Inc. (NYSE: RING) is comprised of 41 companies that derive a majority of revenues from gold mining across eight countries, with Canada at 57 percent and South Africa at 14 percent being the most heavily weighted countries.

The top individual holdings include:

  • GG at 15.4 percent
  • ABX making up 11.9 percent
  • NEM coming in at 8.9 percent

The ETF is down 10 percent over the last 12 months and is up 33 percent from the November low. RING has an expense ratio of 0.39 percent.

Upside potential for the gold mining ETFs has increased due to the moves by central banks around the world and the fact the sector is so beaten down. That being said, the long-term trend for the precious metals remains down and there is a risk the trend will continue after a short-term rally.

Posted-In: Canadian Central Bank Centamin Egypt LtdSector ETFs Specialty ETFs Commodities Markets Trading Ideas ETFs Best of Benzinga


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