Gold prices YTD
Gold prices have been on a roll since July 2017, having risen from ~$1,200 per ounce to above $1,300 per ounce as of mid-September. It appears that geopolitical tensions, especially in the Korean peninsula, have boosted the safe-haven appeal of the metal.
At the beginning of September 2017, gold rose above $1,326 per ounce due to Hurricane Harvey, North Korea’s missile test, and the weaker US dollar. But now investors are wondering if prices will actually breach $1,400 per ounce.
Between GLD and GDX
YTD (year-to-date), the VanEck Vectors Gold Miners ETF (GDX) has not shown the same leverage, which isn’t a big surprise. In 2016, gold prices rose 8%, while GDX surged 54%. GLD has gained 16.8% YTD (as of September 8, 2017), while GDX has only gained 20.7%. But it’s only recently that GDX has caught up with the increase in gold prices. At the end of August, the rise in GLD became higher than the growth in GDX.
This anomaly is mostly due to the company-specific factors playing a larger role in miners’ stock price movements compared with precious metal movements. Notably, Gold Fields (GFI), Iamgold (IAG), Kinross Gold (KGC), Franco-Nevada (FNV), and Royal Gold (RGLD) have been the best performers in 2017 YTD.
To be sure, many variables have impacted gold prices so far this year, including the progression of the US dollar, the Fed’s rate hike expectations, geopolitical concerns, and Trump’s agenda.
In this series, we’ll explore these factors in detail and examine the outlook to assess the direction of gold prices going forward.