Gold Miners (GDX) Beat The Spot

May 10, 2012 10:17 AM EDT
Gold mining stocks continue to outperform vs. the spot price of gold.

Market Vectors Gold Miners ETF (NYSE: GDX), which tracks the price of gold mining companies, has outperformed the SPDR Gold Shares (NYSE: GLD) by about 1 percent in the last 4 trading session, and looks to outperform again today.

Traders are opting to purchase miners instead of gold with hopes that the mining stocks are cushioned against short term drops in the price of gold, a strategy that might prove valuable assuming there is a massive selloff in spot gold.

Today several analysts, including analysts at Goldman Sachs, have come out with updated projections on 2012 gold outlooks, and most of them remain bullish.

In addition, some may be initiating positions in the gold miner as dividend plays. A number of prominent players have raised payouts recently, making them attractive income vehicles.

Barrick Gold Corp. (NYSE: ABX) recently raised its qtr. dividend 33% to $0.20, offering a current yield of 2.1%. Kinross Gold (NYSE: KGC) also recently raised its dividend 33%. Newmont Mining (NYSE: NEM) offers a 3% yield.

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