Gold and silver weak in 2017
The performance of gold and silver so far in 2017 is weaker than most of the other industrial metals. The SPDR Gold Shares (GLD), which tracks gold spot prices, has returned 9.2% year-to-date. The iShares Silver Trust (SLV), which gives exposure to spot silver prices, has returned only 0.7% YTD (year-to-date) as of December 18, 2017. There are many factors that explain the weaker performance of precious metals in 2017. Let’s look at some of them below.
- attractiveness of alternative investment options such as equities and bitcoin (ARKW)
- Fed rate hikes, which lead to an increased opportunity cost of holding gold
- stable to strengthening US economic conditions and job market
- recovering US dollar
Which gold miners still made investors money?
Our previous series What Can Investors Expect from Gold Prices in 2018? looked at how precious metals could remain muted in 2018. But there are ways investors can still make money while getting exposure to precious metals. In this series, we’ll look at the top five performing gold miners in 2017 YTD. These miners have far outperformed the VanEck Gold Miners ETF (GDX), which seeks to replicate the performance of the NYSE Arca Gold Miners Index. While GDX has returned 5.2% YTD, the five miners listed below have given at least five times that return YTD.
Top 5 gold miners
Below are the top five gold miners as well as royalty and streaming plays that have had the best stock performance in 2017 YTD.
- Iamgold (IAG): 44.2%
- Gold Fields (GFI): 37.5%
- Royal Gold (RGLD): 33.6%
- Kinross Gold (KGC): 30.9%
- Franco-Nevada (FNV): 27.8%
In the rest of this series, we’ll look in detail at the performances of these miners. We’ll also see what analysts are expecting from them in terms of revenues and margins in 2018 and beyond and what factors could drive these companies going forward. Investors can thus get a hint of the expected future direction of these miners’ stocks, which could help investors make investment decisions.