• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Gold Miners Performance Versus Gold — Does It Say Sell Gold?
Stock

Gold Miners Performance Versus Gold — Does It Say Sell Gold?

by August 22, 2024
by August 22, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

In Monday’s DecisionPoint Trading Room video we were asked why we cover Gold Miners (GDX) as well as Gold (GLD). There are three reasons:

Some people prefer to own the commodity, Gold, and others prefer to own an operating company that benefits from the price of Gold, such as Gold Miners. For a profitable mining company, when Gold increases in value, most of the increase goes straight to the bottom line because cost of goods is already paid for.Other people prefer Gold Miners because they may pay a dividend, and typically they out-perform Gold by a lot. That applies to movement in both directions. That is to say, Gold Miners will typically go up faster than Gold, but Miners also go down a lot faster than Gold.

This morning I heard a money manager who asserted that people who own Gold should be selling it because, while Gold has been making all-time highs, Gold Miners need to advance another +50% to equal it 2011 all-time highs. The chart confirms that, but there is more to consider in this regard.

Here is a performance chart comparing the two from the 2011 top to the present, and we can see that GDX has underperformed GLD by about half.

But let’s look at just the decline from the 2011 top to the 2015 lows. We can see that GDX fell at an accelerated rate, driven by the negative sentiment associated with GLD’s decline.

The chart showing the performance from the 2015 lows shows that GDX has out-performed GLD by a lot, as we would expect; however, GDX took a -45% hit in 2022 because of the COVID scare. Also, GLD had a rather tedious two-year sideways episode in 2020 to 2022, which would have been uninspiring to potential Miners investors. Nevertheless, GLD is still out-performing GLD by a considerable amount.

Conclusion: While the assertion that GDX under-performance since the 2011 all-time high justifies avoiding Gold, I think the premise does not consider all the evidence. Most important was the COVID hit, which drove GDX down over -2.5 times more than GLD. That had less to do with Gold’s prospects than it did with general panic.

Introducing the new Scan Alert System!

Delivered to your email box at the end of the market day. You’ll get the results of our proprietary scans that Erin uses to pick her “Diamonds in the Rough” for the DecisionPoint Diamonds Report. Get all of the results and see which ones you like best! Only $29/month! Or, use our free trial to try it out for two weeks using coupon code: DPTRIAL2. Click HERE to subscribe NOW!

Learn more about DecisionPoint.com:

Watch the latest episode of the DecisionPointTrading Room on DP’s YouTube channel here!

Try us out for two weeks with a trial subscription!

Use coupon code: DPTRIAL2 Subscribe HERE!

Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin

(c) Copyright 2024 DecisionPoint.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

Helpful DecisionPoint Links:

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking

Bear Market Rules

Gold

You Might Also Like
  • MUST SEE! Top 10 Stock Picks For June 2024
  • Don’t Miss the Move Into These NEW Areas!
  • Here’s Why Growth Stocks Outperformed Last Week!
  • Applying Key Ratios to the Broader Market Surge: Are We at the Threshold of a New Trend?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Looking for the Next Entry Point in SPY? USE RSI!
next post
David Marcus: Meet the RFK Jr voters who could cause an earthquake in the 2024 election

You may also like

Three Breadth Indicators to Confirm a Bullish Market Trend

May 10, 2024

Sector Rotation Suggests Offense Over Defense

November 20, 2024

Equities Remain in Strong “Go” Trend, Powered by Financials

September 23, 2024

How to Chart In Multiple Timeframes Like A PRO

April 20, 2024

Major Indexes Have Reached Bull Market Perticipation Levels

June 15, 2023

Top 3 Pitallfs YOU Probably Make When Trading

July 13, 2023

Top Techniques for Finding Strength in Sectors

December 11, 2024

Red Flags Raised by Bearish Engulfing Patterns

July 6, 2023

2024 is Shaping Up Like 2021, Which Did Not End...

November 22, 2024

What’s the Secret to Crushing the S&P 500?

January 24, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Dick’s Sporting Goods stands by full-year guidance — even with tariffs looming

      May 28, 2025
    • Top Sectors to Watch + The 18 SMA Setup Every Trader Should Know

      May 28, 2025
    • Macy’s CEO says retailer will hike some prices as tariffs cut into profits

      May 28, 2025
    • 23andMe to delist from Nasdaq, deregister with SEC

      May 28, 2025
    • Walmart fined for shipping realistic toy guns to New York, violating state law

      May 28, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,763 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,470 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,449 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,427 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,305 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,101)
    • Investing (538)
    • Stock (2,576)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Dick’s Sporting Goods stands by full-year guidance — even with...

      May 28, 2025
    • Top Sectors to Watch + The 18 SMA Setup Every...

      May 28, 2025
    • Macy’s CEO says retailer will hike some prices as tariffs...

      May 28, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,101)
    • Investing (538)
    • Stock (2,576)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    The NASDAQ Is Eyeing A Major...

    March 26, 2023

    Spot Big Reversals Using the ADX...

    April 4, 2024

    The Halftime Show: Under the Hood...

    April 24, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here