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John Nyaradi’s ETF Edge on MarketWatch.com
Commentary: Gold miner funds could offer strong opportunities
By John Nyaradi
Exchange-traded funds tracking the price of physical gold have been in the spotlight for months as the price of the yellow metal has trended into record territory. Lagging and less noticed, however, are funds tracking gold miners stocks that now could offer a profitable way to participate in gold’s rally.
It’s certainly no secret that gold has been on an impressive rally that many analysts expect to continue into the indefinite future. The price of SPDR Gold Trust GLD -0.18% is up more than 25% year to date and so many investors who haven’t participated in this run might feel like the train has left the station without them.
However, ETFs focused on the stocks of gold mining companies have lagged in this rally so far. Case in point, Market Vectors Gold Miners ETF GDX +0.23% is up approximately 5% year to date. This divergence could offer something of a “value investing” play in the gold market.
One thing seems certain as we head for the end of the year; either physical gold is overvalued or the miners are undervalued. It only makes sense that if gold continues its climb that the miners and their ETFs could play catch up.
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