How Barrick Gold Correlates to Gold
Mining correlations with precious metals
Amid the turbulence in markets, precious metals started to rise due to the increased haven bids. The rise in the metals was also evident in mining stocks.
For those investors interested in parking their money in mining stocks, it’s crucial to understand which stocks are closely tied to precious metals and which aren’t. Stocks with higher correlations to precious metals will likely be even more affected by global indicators that influence precious metals themselves.
Interested in ABX? Don't miss the next report.
Receive e-mail alerts for new research on ABX
The Physical Swiss Gold Shares (SGOL) and the Physical Silver Shares (SIVR) have seen significant correlations with their respective precious metals. These two funds closely track the performance of their respective metals and have risen 9.1% and 14.8%, respectively, on a YTD basis.
Among Coeur Mining (CDE), Barrick Gold (ABX), Cia De Minas Buenaventura (BVN), and AngloGold Ashanti (AU), Cia De Minas has the highest correlation with gold, while Barrick Gold has the lowest correlation with gold on a YTD basis. Over the past three years, Cia De Minas and Barrick have seen upward correlations with gold. The other two miners have a mixed upward-downward trend.
Remember, studying the upward and downward trends is important for metal investors, as price change predictability can be affected by rises and falls in precious metal prices.
Barrick’s correlation with gold has increased from a three-year correlation of ~0.59 to a one-year correlation of ~0.65. A correlation of ~0.65 means that ~65.0% of the time, Barrick has moved in the same direction as gold over the past year.