logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Digging Into Gold Mining ETF GDX

By  +Follow December 6, 2013 8:22AM
Share:
Tickers Mentioned:

A quick look at the most actively traded ETFs by average volume provides no surprise for the top name: the SPDR S&P 500 ($SPY) moves and average of 111 million shares a day. Coming in right behind it is the iShares MSCI Emerging Markets Index ETF (EEM) , also a predictable entry. However, some might be a touch surprised to see the ETF with the third-highest average daily volume: the Market Vectors Gold Miners ETF ($GDX).

While the majority of the ETFs traded the most actively are very broad, covering large swaths of the global economy, the GDX is much more specific, focusing entirely on one segment (gold) or one industry (mining). As such, GDX stands out for being an unusually narrow entry into the ETF category to attract so much attention.

Just Another Gold Play?

It’s not hard to see the main reason why GDX is so popular: gold. Gold bugs are notoriously voracious, and gold always seem to spark the imagination of investors across the globe. And, while gold investing usually takes the form of buying (or shorting) commodities and futures contracts, the GDX is a way to indirectly speculate on the price of gold while still using the familiar vehicle of an equities ETF. A quick comparison of gold spot prices and shares in GDX show that the value of GDX tends to mirror movements in the price of gold.

However, that’s not the whole story. Over the last year, movements in the spot price of gold are generally closely matched by shifts in GDX, but they tend to be magnified for GDX. And, taking it a step further, looking back of 5 years shows a pretty clear correlation between the two, but with the GDX showing considerably more independence. The GDX was more volatile while on the rise during 2009 and 2010, then fell much further when gold prices started their extended plunge in September of 2012. Over the last year, the price of gold lost about a quarter of its value, while GDX is off over 55 percent.

What’s in GDX?

So while investing in GDX is, in many ways, a proxy for investing in the price of gold, it’s not a perfect match. Mining stocks tend to experience swings in the price of gold more violently, rising higher and falling farther than the precious metal. They can also exhibit much greater volatility.

Anyone planning an investment into GDX should probably do their research, as a result. Because GDX is comprised of stocks in 37 different gold-mining companies, many of the fluctuations based on the situations of individual companies are evened out. However, that doesn’t mean that there aren’t a handful of major players that can greatly affect the ETF.

The GDX tracks the NYSE Arca Gold Miners Index. It has five different companies that consist of 5 percent of holdings or more. They are Goldcorp (GG) with 11.7 percent, Barrick Gold Corp. (ABX) with 10.56 percent, Newmont Mining Corp. (NEM) with 8.06 percent, Randgold Resources (GOLD) with 5.05 percent, and Yamana Gold (AUY) with 5 percent.

And Did You Say Dividend?

Perhaps one of the most important considerations, though, in investing in GDX instead of gold would be the ETF’s dividend yield currently sitting at just under 2.25 percent. Simply put, buying commodities or futures doesn’t pay a dividend. Owning gold means just that: you own gold. And that gold doesn’t care how you feel about any of it.

A gold mining company, though, has to treat you like it would any other shareholder. You own a piece of that company, and you share in its profits. As such, while you’re still susceptible to fluctuations in the price of gold, it’s a lot easier to hang onto a dividend stock through hard times than it is physical gold.

Gold Miner ETF is a Different Kind of Gold Play

Ultimately, like any mining stock ETF, GDX is tied tightly to the price of gold. However, that doesn’t mean that it’s simply another way to bet on the price of gold. The existence of a dividend, greater volatility, and a composition made up of several different companies each with their own individual circumstances makes GDX its own beast.

Results for gdx
Soltan Capital, LLC
18 Apr 14 13:45:45
@Mukesh_Gazza Check us Out on http://t.co/dtVWtGUqos $VIX $GDX $USO $UGA $DJX $NDX $FOSL $DJIA $GLD
Soltan Capital, LLC
18 Apr 14 13:45:39
@Espenhaug Check us Out on http://t.co/dtVWtGUqos $VIX $GDX $USO $UGA $DJX $NDX $FOSL $DJIA $GLD
Soltan Capital, LLC
18 Apr 14 13:45:33
@thinkadv_career Check us Out on http://t.co/dtVWtGUqos $VIX $GDX $USO $UGA $DJX $NDX $FOSL $DJIA $GLD
Stockaholics
18 Apr 14 13:35:11
Members saw 5,000% gains on Penny Stock Alert's in 4 months! Subscribe Today: http://t.co/5B5saivZk0 $PZG $APOG $GDX
TradingView
18 Apr 14 10:54:35
$GDX chart by CosmicDust: http://t.co/a6J59gTMUb GDX/SPY is bottoming?.
chartguy89
18 Apr 14 09:19:59
MU Stock Chart $MU $PG $GDX $SKTO http://t.co/rj44JMg8XB http://t.co/zRbKPdVee7
lookn4wins
18 Apr 14 09:12:19
$PCLN Stock Chart $PCLN Most recent stock chart and technical analysis. $ELTP $JPM $GOOGL $GDX $F $ZNGA http:/ http://t.co/ToJY1OQPA0
DennyT
18 Apr 14 09:08:22
GDX Interactive Chart $GDX $CAT $LNG $XLE $SMN Opinion Today,Daily Chart,Stock,News,keeping this on watch Stoc http://t.co/EIChissrq1
lookn4wins
18 Apr 14 09:05:18
$SLV Parabolic SAR $SLV Most recent stock chart and technical analysis. $NKE $CTIC $GDX $WYNN $XLF $GDXJ http: http://t.co/ZgBS29prbM
iHangout
18 Apr 14 08:15:04
jim50: Xtremepicks Alerts: $GDX Low DateApr 17 2014 Open23.8 High23.96 Low http://t.co/JjToYcR4jf
jim50
18 Apr 14 08:08:06
$GDX Low Date=Apr-17-2014 Open=23.8 High=23.96 Low=23.54 Close=23.57 Volume=19332000 http://t.co/vT5dgLyhfY
Hard Assets Investor
18 Apr 14 07:26:45
Van Eck’s Foster: Gold Formed Base At $1,200, A Big Plus For Miners Going Forward $GLD $IAU $GDX $GDXJ http://t.co/7H4jUqGK8u
ETFguide.com
18 Apr 14 06:00:18
VIDEO: A Technical Look: How to be long #gold at the right time w/Chad Karnes @etfguide http://t.co/Yhy5oXxZLL $GLD $NUGT $GLTR $GDX $GDXJ
LM_Tentarelli
18 Apr 14 04:01:50
Over 30 Week $IWM $MDY $QQQ $TAN Over 40 Week $FDN $IBB $KOL $XHB Under 40 Week $DXJ $FXI $GLD $GDX
Stockaholics
18 Apr 14 02:15:27
Over 5,000% gains on Penny Stock Alert's in 4 months! Subscribe Today: http://t.co/5B5saivZk0 $PZG $APOG $GDX
chartguy89
18 Apr 14 00:59:49
GDX 0.06 Stock Charts $GDX Goldex Resources Corp. (CVE) GDX Stock Chart - 1 Month http://bigcharts.marketwatch http://t.co/jwfg0Kks4I
Foghorn returns
18 Apr 14 00:46:09
$GLD $SLV $GDXJ $NUGT $GDX $UUP $SPY $DIA $QQQ The Federal Reserve Has No Integrity http://t.co/TFYUmZ6l5l Gold Manipulation!
TradingView
18 Apr 14 00:22:52
$GDX chart by @imilkon: http://t.co/HjmkkSmJqT GDX,D.
Henrik Zeberg Jensen
17 Apr 14 20:51:03
RT @Sqwii: I believe that #GOLD #SILVER and miners $GDX is still going to have a strong rally all year long here in 2014 into 2015. Buy di…
OTPicks.com
17 Apr 14 20:15:12
http://t.co/QzFp1WC0ss danrocks: $GDX On Alert $DGRI $XHB $ARTX $TTDZ $FXI: danrocks http://t.co/pverpgaLTN http://t.co/QzFp1WC0ss
O T P i c k s . com
17 Apr 14 20:15:09
http://t.co/awZxDQ0zpX danrocks: $GDX On Alert $DGRI $XHB $ARTX $TTDZ $FXI: danrocks http://t.co/sVnexNitr9 http://t.co/awZxDQ0zpX
OTPicks.com
17 Apr 14 20:15:06
http://t.co/QkCFZ8q0T8 danrocks: $GDX On Alert $DGRI $XHB $ARTX $TTDZ $FXI: danrocks http://t.co/RqVmvRPvqb http://t.co/QkCFZ8q0T8
CALL ME TRADER
17 Apr 14 20:12:04
RT @StockTwits: Charts, China Melting Down Gold http://t.co/uknoNABm4q $GLD $GC_F $GDX
gordon gekko is god
17 Apr 14 19:48:47
Weekly ETF Gainers / Losers http://t.co/YI2qe13yK3 $FCG, $XLE, $VDE, $XLI, $EWJ, $VXX, $GDXJ, $VNM, $GDX, $PHYS
OTPicks.com
17 Apr 14 18:52:52
http://t.co/QzFp1WC0ss danrocks: $XLB Showing on my streamers $PFE $KO $FXI $GDX $U: danrocks http://t.co/fdmcj9unw8 http://t.co/QzFp1WC0ss
O T P i c k s . com
17 Apr 14 18:52:49
http://t.co/awZxDQ0zpX danrocks: $XLB Showing on my streamers $PFE $KO $FXI $GDX $U: danrocks http://t.co/5iPx4O6gvR http://t.co/awZxDQ0zpX
OTPicks.com
17 Apr 14 18:52:47
http://t.co/QkCFZ8q0T8 danrocks: $XLB Showing on my streamers $PFE $KO $FXI $GDX $U: danrocks http://t.co/QI0GcbO2Fo http://t.co/QkCFZ8q0T8
LM_Tentarelli
17 Apr 14 18:30:39
EOW ETFs Long $CORN $DBA $FDN $GLD $IWM $KOL $SPY $TAN $TLT $XME $XOP Short $EWJ $GDX $IBB
dalestrnad
17 Apr 14 16:43:47
This may be crazy, but I sold my $WPRT to buy more $JOEZ - still long $aapl $Hemp $gg & $Free ( $spy $gdx $xlf
Lagos Capital
17 Apr 14 15:38:09
RT @CROSSHAIRTRADER: $GDXJ from 4/15. http://t.co/fX9wDNuCfQ $GLD $GDX
David Blair
17 Apr 14 15:36:20
$GDXJ from 4/15. http://t.co/fX9wDNuCfQ $GLD $GDX
Befree
17 Apr 14 14:45:59
Weekly ETF Gainers / Losers http://t.co/StjPJBm33L $FCG, $XLE, $VDE, $XLI, $EWJ, $VXX, $GDXJ, $VNM, $GDX, $PHYS
InvestorPlace
17 Apr 14 13:44:05
Gold and Silver Report: Gold Prices Fall on Ukraine Diplomatic Agreement $GLD $SLV $GDX http://t.co/Gm2em3WJEZ
The Gold Forecast
17 Apr 14 13:38:17
Watch http://t.co/bfVJDmhbOr Chart This: More Downside Pressure For Gold, Substantial Rally Nearby - @KitcoNewsNOW $gld $gdx $GOLD $NUGT
GoldMarketNews
17 Apr 14 13:35:09
#Gold Miners ETF GDX - last: $23.57 @ 4:00pm EST 4/17/2014 http://t.co/7u22spL4qA Check http://t.co/xghwszwIJI $GDX
Prices Gold
17 Apr 14 13:35:05
#Gold Miners ETF GDX - last: $23.57 @ 4:00pm EST 4/17/2014 http://t.co/mDScqb8oIU Check http://t.co/8QhSvl1oQg $GDX
dalestrnad
17 Apr 14 12:53:27
Next week Ill be buying up $GG long. $spy $gdx $ung $aapl $joez $hemp
Pulsar Investments
17 Apr 14 12:52:44
#Gold price indeed falls down as we analyzed two days ago. We have $GLD puts and $GDX longs, looking not very good for now, but we'll wait.
GoldMarketNews
17 Apr 14 12:34:09
#Gold Miners ETF GDX - last: $23.58 @ 3:18pm EST 4/17/2014 http://t.co/4NBCGSl1u5 Check http://t.co/xghwszwIJI $GDX
Prices Gold
17 Apr 14 12:34:09
#Gold Miners ETF GDX - last: $23.58 @ 3:18pm EST 4/17/2014 http://t.co/atQ78gB5Fh Check http://t.co/8QhSvl1oQg $GDX
Gary Jakacky
17 Apr 14 12:17:36
Commented on: "Gold, Silver And The Mining Sector: Prepare For A Severe Fall" http://t.co/PwRyLLkdNP $GLD $SLV $GDX $GDXJ
Seeking Alpha
17 Apr 14 12:10:01
Gold, Silver And The Mining Sector: Prepare For A Severe Fall http://t.co/vkxfRO84nA $GLD $SLV $GDX $GDXJ
Market Int Center
17 Apr 14 12:09:59
Market Vectors Gold Miners $GDX Trading Near $23.44 Support Level ( http://t.co/PYppLw5Gt0 )
JS3 Multimedia
17 Apr 14 11:55:03
Commodities Report 04/17: #Oil hold steady at weekly highs while precious metals dip on Ukraine $GDX $GLD $SLV #crude http://t.co/FFVEBRBtNc
AskModernWallStreet
17 Apr 14 11:50:12
Commodities Report 04/17: #Oil hold steady at weekly highs while precious metals dip on Ukraine $GDX $GLD $SLV #crude http://t.co/QyXnqxr4St
GoldMarketNews
17 Apr 14 11:33:16
#Gold Miners ETF GDX - last: $23.68 @ 2:17pm EST 4/17/2014 http://t.co/EyViQtPl8s Check http://t.co/xghwszwIJI $GDX
Prices Gold
17 Apr 14 11:33:16
#Gold Miners ETF GDX - last: $23.68 @ 2:17pm EST 4/17/2014 http://t.co/47IslxpLdO Check http://t.co/8QhSvl1oQg $GDX
JeffBSF
17 Apr 14 11:13:56
PMs across the board remain at bottom of relative rankings - and seem to be losing the shorter term positives at this point. $GLD $GDX
JS3 Multimedia
17 Apr 14 10:50:39
Commodities Report 04/17: #Oil hold steady at weekly highs while precious metals dip on Ukraine $GDX $GLD $SLV #crude http://t.co/QLahkPFKCQ
James Sweeney
17 Apr 14 10:50:39
Commodities Report 04/17: #Oil hold steady at weekly highs while precious metals dip on Ukraine $GDX $GLD $SLV #crude http://t.co/aygBTqz5QR
				
				
By  +Follow December 6, 2013 8:22AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.