Gold mining exchange traded funds such as the Market Vectors Gold Miners ETF (GDX) will look to keep playing their redemption song this week as six of 30 stocks in the PHLX Gold/Silver Sector Index (XAU) deliver earnings updates.
Novagold Resources (NG) gets the ball rolling Tuesday. The six members of NYSE Arca Gold Miners Index (GDMNTR) reporting combine for about 29.2% of the index. GDX, the largest gold mining ETF by assets, tracks the NYSE Arca Gold Miners Index (GDMNTR), but the PHLX Gold/Silver Sector Index constituents reporting this week are also marquee members of that ETF.
On Wednesday, Agnico-Eagle (AEM) and Kinross Gold (KGC) report. Those stocks combine for over 8% of the PHLX Gold/Silver Sector Index, according to NASDAQ OMX Global Indexes and 8.25% of GDX. Agnico-Eagle and Kinross are GDX’s tenth- and eleventh-largest holdings, respectively, according to Market Vectors data.
ETFs holding gold and silver miners, including GDX, were among the worst-performing sector funds last year, but that trend has been reversed this year. Rising gold prices combined with once-in-a-generation extreme negative sentiment toward miners provided a buying opportunity in the miners for some savvy traders. They have been rewarded as several of this year’s best non-leveraged ETFs are precious metals mining funds. [Bullish View of Gold Miners]
The big earnings week for mining ETFs comes as some of these funds are showing signs of major technical breakouts that could be put to the test. Potentially negative catalysts include unexpected asset writedowns or surprise dividend cuts. [Uplifting News for Mining ETFs]
Thursday is an epic day for gold miners earnings as Barrick Gold (ABX), Goldcorp (GG) and Gold Fields (GFI) report. Those stocks combine for 19% of the PHLX Gold/Silver Sector Index. Barrick and Goldcorp are GDX’s two largest holdings, combining for almost of 27% of the ETF’s weight. Gold Fields has a 2% weight in GDX.
The PowerShares Global Gold and Precious Metals Portfolio (PSAU) is an example of an ETF that tracks a NASDAQ index, in this case the NASDAQ OMX Gold and Precious Metals Index. Goldcorp, Barrick and Agnico-Eagle combine for almost 21% of PSAU’s weight, according to PowerShares data.
XAU Earnings Overview
Data Courtesy: NASDAQ OMX Global Indexes
ETF Trends editorial team contributed to this post.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.