What Slowdown? Gold Stocks and GDX Rose in January
January Was Gold's Strongest Month in a Year!
S&P 500 versus GDX ETF
The rise of precious metals as stock markets fell lifted many mining companies. Gold and silver futures for April and March expiry, respectively, have risen 4.6% and 3.3% on a 30-day trailing basis. The S&P 500 ETF (SPY) fell in January by almost 4%.
The mining sector (GDX) rose 4% despite the carnage in the equity sector. Most of the component companies of GDX grew as their core asset prices rose on safe haven demand.
Miners surge
GDX holdings Barrick Gold (ABX), Agnico-Eagle Mines (AEM), and Newmont Mining (NEM) rose 34.5%, 12.3%, and 12.3%, respectively, over the past 30 trading days. These three companies together are 17.1% of the GDX ETF.
Another driver of January’s gold performance was the South Africa–based miners that benefited from the deteriorating rand against the US dollar. South African miners rose almost 35% in January, lifting up the mining sector’s overall performance versus the wider stock markets.
Most of the mining sector suffered severely in 2015, and most were trading at a considerable discount from their 100-day moving average prices. The current price revival got most miners close to these average figures—and a few are trading even higher.
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