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Weekly Sector Update – GDX ($)

GDX is VanEck’s Market  VectorsGold Miners ETF.   Gold has been doing great the last couple of weeks.  Is there seasonality in gold?  In recent years the summer months have seemed strong.  There has also been a pattern of economic weakness early in the year.  The reasons are difficult to discern.

I once wrote that there were “golden goal posts.”   That article (from four years ago) still reads pretty well. Gold rallied when there was fear of economic collapse and also when there was fear of hyper-inflation.  Despite the efforts of some gold bugs to maintain simultaneously both viewpoints, that really makes little sense.

Investor Take

GDX has a P/E ratio of 27 and a yield of 0.85%.  This investment makes sense only if you fear inflation, expect a declining dollar, or think that a major collapse is coming.  In the absence of these concerns, the ball is getting kicked between the golden goal posts.

Holding some gold positions as a hedge is reasonable for many investors.  This means a 5 -10% allocation, not a substitute for normal investments.

Top 10 Holdings (%)as of 05/31/14

Total Holdings:             40
Swipe to view full data
Holding Name
Ticker
Shares Market Value (US$) % of Net Assets
Goldcorp Inc
GG US
41,825,260
977,456,326 13.51
Barrick Gold Corp
ABX US
59,971,048
969,146,088 13.40
Newmont Mining Corp
NEM US
25,639,521
586,888,636 8.11
Silver Wheaton Corp
SLW US
18,403,324
378,004,275 5.23
Newcrest Mining Ltd
NCM AU
39,469,694
359,178,073 4.96
Randgold Resources Ltd
GOLD US
4,762,298
354,330,494 4.90
Franco-Nevada Corp
FNV US
7,575,295
352,554,229 4.87
Anglogold Ashanti Ltd
AU US
20,825,983
328,842,272 4.55
Yamana Gold Inc
AUY US
38,789,641
285,491,758 3.95
Agnico-Eagle Mines Ltd
AEM US
8,969,033
271,946,529 3.76
Top 10 Total (%) 67.24

Trader Take

The chart below is a nice set up for a great upswing. If (big if) the past predicts the future, gold should have a nice start to the fall season. September was a great month last year.

Model Output

The ratings this week are slightly more sluggish than last week. Felix still has a high 65% of ETFs that have a positive strength. Median strength declined slightly to 13 and just the tiniest uptick in the number of ETFs in the penalty box.

TCA-ETF Felix EXPANDED JULY 02, 2014

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    Weekly Sector Update – GDX ($)

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