Why Wall Street Loves These Five Gold Stocks


Jun. 28 2019, Published 2:36 p.m. ET

Gold miners’ leveraged performance

Gold miners are usually a leveraged play on gold prices. In 2018, as the SPDR Gold Shares (GLD) fell 1.9%, the VanEck Vectors Gold Miners ETF (GDX) amplified that loss by falling 9.3%.

The price action in leveraged gold ETFs such as the Direxion Daily Junior Gold Miners Bull 3X ETF (JNUG) and the Direxion Daily Gold Miners Bull 3X ETF (NUGT) has been more dramatic. JNUG and NUGT have seen losses of 48% and 45%, respectively. In the last one month, while GLD has risen 11.6%, GDX, NUGT, and JNUG have amplified those gains to 25.9%, 91.7%, and 87.1%, respectively.

Article continues below advertisement

Company-specific factors

In addition to gold’s price movements, gold miners are also affected by company-specific factors. However, the price movements of miners depending on gold prices will also vary depending on their financial as well as operational leverage.

Among miners, Eldorado Gold (EGO), New Gold (NGD), IAMGOLD (IAG), and Barrick Gold (GOLD) have seen the highest gains of 50.6%, 44.4%, 40.3%, and 36.4%, respectively. Eldorado and New Gold were marred by geopolitical issues at their mines, and the current gold rally is providing them with a nice tailwind. IAG and Barrick Gold are operationally and financially quite leveraged to gold prices.



More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.