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Junior Gold Miner ETF Jumps 30% in Quarter to Beat Bullion


Market Vectors Junior Gold Miners ETF (GDXJ) is on track for a roughly 30% gain in the third quarter with the small-cap miner fund pulling away from bullion prices since the beginning of August.

GDXJ is also outperforming its large-cap peer, Market Vectors Gold Miners ETF (GDX) , which is up about 20% the past three months. The largest bullion-backed ETF, SPDR Gold Shares (GLD) , has gained about 13%.

Paul Weisbruch, head of ETF and options trading at Street One Financial, notes that options traders have been using GDX call options to take a bullish stance on gold-related stocks. [ETF Chart of the Day: Gold Miners]

Just in September, investors have added $306.7 million to GDX and $181.9 million to the small-cap GDXJ, according to IndexUniverse ETF flow data. Investors have been piling into gold and miner ETFs on central bank stimulus. [Investors Add Nearly $3B to Gold ETFs in September]

Christian Magoon at GoldETFs.biz notes that GDX has outperformed mighty Apple (AAPL) by nearly 10 percentage points over the last month.

“This is especially surprising given that Apple’s iPhone 5 was revealed this month and analysts expect it to be the most purchased Apple phone of all time,” Magoon writes. “So how has a gold miners ETF, which owns companies focused on gold mining activities across the globe, outdistanced Apple by so much? The answer is that QE3 is more powerful than iPhone 5.” [Apple Drags Nasdaq-100 ETF on iPhone 5 Sales]

Market Vectors Junior Gold Miners ETF

Full disclosure: Tom Lydon’s clients own GDXJ and GLD.

The opinions and forecasts expressed herein are solely those of John Spence, 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.