Gold fell 11% in 2015
Gold prices saw its third consecutive annual decline in 2015, a loss of 11%. Silver also followed suit with a decline of 12%. Interest rate hike expectations from the Fed and a stronger US dollar (UUP) (USDU) impacted precious metals in 2015. Physical metal prices fell, as did the shares of precious metal companies.
Outperformers and underperformers
In 2015, the VanEck Vectors Gold Miners ETF (GDX) fell by 28%. Only a few stocks in the precious metals and mining space, including Agnico-Eagle (AEM), Semafo (SMF), and Newmont Mining (NEM) outperformed gold prices. This was mainly due to their low-cost positions, assets in stable jurisdictions, and local currency devaluations.
The worst-performing gold stocks of 2015 include Yamana Gold (AUY), Eldorado (EGO) Iamgold (IAG), and Harmony Gold (HMY). High cost structure, political and geographical-specific issues, and high debt were the major reasons behind the underperformance of these stocks.
Intermediate miners were down 23% in 2015 with the biggest decline coming from Eldorado and Yamana Gold (AUY). Royalties and streaming, on the other hand, were down by 18% in 2015.
While this was a significant story of 2015, 2016 has started on a sweet note for gold and gold miners. In the next part of this series, we’ll see what led to the gold price rally into 2016 and how sustainable that rally seems to be.