VanEck Gold Miners ETF (GDX) Skyrockets To 11-Month Highs: A Stunning 25% YTD Surge As Precious Metals Dazzle

Zinger Key Points
  • Gold miners have risen 25% in 2023, becoming the best performing U.S. equity industry this year.
  • A correlation with gold prices suggest gold miners may still have room catch up further gains.

The VanEck Gold Miners ETF GDX, an exchange traded fund that invests in equities of firms operating in the metals and mining, gold, and silver sectors, has risen to levels last seen in early May 2022, driven by big gains in precious metals commodities.

After rising more than 25% in 2023, gold miners are currently the best-performing industry year-to-date, surpassing the VanEck Semiconductor ETF SMH.

Backed by fundamentals: Gold prices surged to $2,040/oz on Thursday, approaching fresh 2023 highs as falling producer inflation and increasing jobless claims fueled market speculation about the Fed's rate hiking cycle nearing an end. Gold prices have risen 12% so far in 2023. 

Silver also rallied to $25.83/oz, a price last seen a year ago, and has risen nearly 25% in the past month alone. 

Five Gold Miners To Watch: The strongest contributors in the previous month to the GDX's performance were Gold Fields Limited GFI up 53%, Agnico Eagle Mines Ltd. AEM up 24.3%, AngloGold Ashanti Ltd. AU up 47%, Barrick Gold Corp. GOLD up 18%, and Newmont Corp. NEM up 13%.

Read also: 5 Stocks To Watch After Thursday's Inflation, Jobless Data: Why Netflix, 2 Gold Miners Are Moving

GDX Still Undervalued Compared To Gold Prices

Gold miners, as represented by the VanEck GDX ETF, are catching up to gold, but remain undervalued in comparison to current bullion prices.
As the figure below indicates, historically, there has been an almost perfect link between gold prices and the GDX, which somehow weakened last year.

GDX was trading above $40 per share when gold prices were at this level in July 2020. This correlation might imply that gold miners still have room for gains if gold prices holds these levels or potentially rise further. 

GDX vs Gold price – Chart: TradingView 

Now Read: EXCLUSIVE: Savings Crisis Looms As One-Third Of Americans Face Dwindling Nest Eggs In Just Three Months, Poll Reveals

Photo: Shutterstock

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Posted In: Long IdeasMacro Economic EventsSector ETFsCommoditiesEconomicsMarketsTrading IdeasETFsAgnico Eagle Minesbarrick goldGoldgold fields limitedGold Minersgold miningNewmont
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