CA - GDX ETF: Why Gold Miners Lag Gold Prices
2024-05-06 12:30:33 ET
Summary
- Gold miners, represented by the GDX ETF, have underperformed gold prices in the past year, with a relative lag of over 19%.
- The lag is likely to continue due to factors such as the time delay in developing mining facilities and rising production costs.
- High fuel/energy prices, labor costs, geopolitical tension, and inflationary pressure are expected to drive up production costs for gold miners in the foreseeable future.
GDX ETF prices vs. gold prices
As gold prices gain momentum, investors have resumed their enthusiasm for gold miners, which are typically viewed as a leveraged play on gold in traditional wisdom. As an example, the chart below summarizes the current ratings on the VanEck Gold Miners ETF ( GDX ) from Seeking Alpha writers in the past 90 days. As seen, the ratings are overwhelmingly bullish, with an overall Buy rating and an overall score of 3.85....
GDX ETF: Why Gold Miners Lag Gold Prices