2 Oct

Why Gold Stocks Have Fallen More than Gold this Year

WRITTEN BY VanEck
Market Realist Partner Voice What's this? Partner Voice allows brands to connect directly with the Market Realist audience to provide educational information about products and investment choices. Each report is produced by the brand and approved for publication if our research team deems it educational and suitable for the Market Realist audience. Market Realist may receive payment or other compensation from these brands. The opinions that brands express in these reports are their own.

Van Eck

Gold Stocks Decline While Sentiment and Changing Mandate Add Pressure

The gold price weakness caused gold stocks to fall in August as the NYSE Arca Gold Miners Index (GDMNTR)2 and the MVIS Global Junior Gold Miners Index (MVGDXJTR)3 both declined 12.5%. The underperformance was reminiscent of February when GDMNTR lagged gold by 8%. By July, the miners had clawed back the performance they had lost in February. While we know of no fundamental company news that explains the weakness of gold stocks, we do know of potential selling pressure that could account for it.

Why Gold Stocks Have Fallen More than Gold this Year

Market Realist

Gold (OUNZ) prices have declined over 10% this year. However, gold stocks have gotten a bigger knock this year. The NYSE Arca Gold Miners Index (GDX) has declined 20.6% year-to-date YTD while the MVIS Global Junior Gold Miners Index (GDXJ) has slumped 21.0%.

Goldcorp (GG) is one of the biggest stocks in the sector with the smallest negative returns this year. As of September 28, it has declined 19.4%, compared to Barrick Gold’s (ABX) return of -23.0%.

Kinross Gold (KGC) has plummeted -36,9%, and Newmont Mining (NEM) has declined 18.9%.

Other than lower gold prices, some company-specific factors have also led to the decline in gold miner’s stocks. Barrick Gold’s stock has been affected by some problems at its mines. KGC and Eldorado Gold (EGO) have been struggling as a result of mining code changes and government interferences. New Gold (NGD), meanwhile, has faced mechanical and operational issues at its biggest mine.

Latest articles

Apple (AAPL) investors have had a roller coaster week. Apple stock has lost just under 2% in a week, ending on August 23, 2019.

Competition taking a toll on Netflix as its share of US subscription video streaming market keep falling as rivals gain ground.

Crude oil production continues to rise, and oil prices remain at $50. Despite that, US energy stocks aren’t getting investors’ interest.

Apple stock fell 4.6% as the US-China trade war intensified today. China warned of tariffs on more US goods, followed by Trump's tweeted response.

In response to new tariffs from China and President Trump's tweets, the market tanked to session lows on Friday. The DJIA nosedived more than 600 points.

Coverage on Cresco Labs has increased from seven analysts in July to nine in August. Six analysts favor a “strong buy,” and three recommend a “buy.”