Gold’s price performance
Gold prices have fallen 3% YTD (year-to-date) as of April 26. Gold prices fell ~1.9% in 2018 and significantly underperformed broader markets. The S&P 500 Index (SPY), the Dow Jones Industrial Average Index (DIA), and the NASDAQ Composite Index (QQQ) have gained 17.4%, 13.8%, and 23.6%, respectively. While markets have gained with the Fed backing down from its hawkish stance early this year and optimism growing about US-China trade, gold prices have been weak. Investors flocked to risk assets and shunned safe-haven assets.
Gold miners’ performance
Gold miners are usually a leveraged play on gold prices. Last year, gold prices fell 1.9% and the VanEck Vectors Gold Miners ETF (GDX) fell 9.3%. However, GDX has only done slightly better than gold this year. Compared to the SPDR Gold Shares’ (GLD) YTD loss of 2.9%, GDX has lost 1%. Gold mining stocks’ performances have varied widely YTD depending on their fourth-quarter performances and their 2019 outlooks.
Agnico Eagle Mines (AEM) and Iamgold (IAG) have outperformed senior and intermediate gold mining peers this year by rising 49.7% and 18.7%, respectively. In contrast, Eldorado Gold (EGO) and Barrick Gold (GOLD) have fallen 14.7% and 4.0%.
Gold’s underperformance compared to equity markets and other commodities YTD hasn’t deterred most of the analysts. Analysts are increasingly bullish on the metal. Goldman Sachs, Deutsche Bank, and Bank of America are positive on gold’s price outlook.