VanEck Gold Miners ETF (GDX)

An ETF with large gold miners in the US. The gold price has been pulling back and miners have slid down as well. It is getting whacked from both sides. Go into this when the stock market is going to do well as well as the metals. He would not hang on to this at this time. This is not a seasonally strong period for gold.

When buy this ETF, you are just buying what is in the index. It’s not managed, it is just market cap weighted. Managed money is completely different. He has very little overlap with what is in the index, and has a history of outperforming the index. Compare this against the different mutual funds to see how they performed.

Gold mining shares have done very well this year on the back of a 20%+ rise on the price of bullion. Recently they have checked back quite a bit, and this is an attractive entry point. One of the challenging things with the miners is that gold shares have become a big part of some peoples’ risk parity type strategies. When big money wants to make a shift in or out, they seem to distort prices quite dramatically, so he has cut back a little on his gold mining shares to try and figure out what is happening. (See Top Picks.)

Yes, GDX is too heavily weighted to ABX. He does not know of an equally weighted way to play it. He would prefer to play it globally. He would suggest crystallizing some losses by selling the stocks and buy an ETF to play going forward. ZGD-T would be a suggestion.

Gold. Chart shows this was at $20 in October, took a turn down, which was followed by another spike back up to $20 in November. This is called a Pivot. Chart looks like it is just about ready to move higher and take it out. It might be doing that today, but it has to be done on volume, and then give it 3 weeks to confirm that it did occur.

(A Past Pick July 31/14. Down 7.72%.) Gold took off in June and then flat lined July and August. This was followed by the parabolic rise in the US$, which crushed all commodities. This looked like it was forming a long-term basing pattern. The bad news is that the seasonal period for gold is coming to an end in September. However, from a technical perspective, he is seeing the higher lows continuing, so it could be charting out a significant long-term basing pattern. If it breaks above $28, be a Buyer, because it could go significantly higher. The implied target is about $35.

(Top Pick Jul 11/14, Down 4.25%) Seasonality has not clicked in yet. Gold equities are now outperforming the price of gold.

When the gold miners report their earnings at the end of July that is the kick off to the start of the period of seasonal strength for the miners. This is experiencing a dip today, so you could take advantage of some of the weakness. The average gain between the end of July and September 25 is about 8%.

Typically the gold sector moves higher from July 12 right through until October 9.

Gold ETFs. Don’t buy Gold or Gold ETF in general right now. Platinum and Palladium and Silver normally outperform this time of year. July is a good time to be in gold or gold equities each year.

Chart shows a bit of a base building pattern although we are out of the period of seasonal strength. Seasonal strength for gold miners occurs from July into September. However, this year. September was an awful month.

(Top Pick Aug 15/12, Down 38.81%) Was a seasonal trade. Sold end of September. He would get back in now.

This has 13% of American Barrick, 12% Goldcorp, so 25% is in 2 companies, which are both having issues.

(Top Pick Jun 22/12, Down 35.91%) It was a good seasonal trade last year. It is getting lined up again. Wait until the middle of July.