October Gold ETF Blues Fade (GLD, GDX, IAU, GLDX)
Christian Magoon: October has historically been a month that has produced negative gold price returns over the last 10 plus years. In fact October has been one of the three worst months for gold ETF investors. This past October was right in line with historical averages as gold ETF shares tracking the price of gold were off around 3%. Gold mining stocks, as represented by the Market Vectors Gold Miners ETF (NYSEARCA:GDX), were off 1.6%. Here’s an October performance chart displaying GDX versus the largest physical gold ETF, the SPDR Gold Trust (NYSEARCA:GLD). The chart was created using Google Finance.
Luckily for gold ETF investors, November has historically been the best month for the price of gold. This November is already showing a slightly positive trend as GLD has gained one third of a percent. Gold mining ETFs have fared a lot worse however. The stock market swoon in light of a combined Obama reelection and looming fiscal cliff in the U.S. has pushed gold stock ETFs lower by around 5%. Here’s the month to date Google Finance performance chart featuring GLD and GDX.
Despite an anemic October and slow reversal in November physical gold ETF shares have gained double digits year to date. The iShares Gold Trust (NYSEARCA:IAU) leads the pack gaining over 10% in 2012. The largest gold ETF, the SPDR Gold Trust (NYSEARCA:GLD) trails IAU slightly. Here’s a snapshot of the year to date performance grid from the interactive gold ETF list.
Gold stock ETFs are faring far differently in 2012 as their increased volatility has been a handicap in a year with more gold low points than high points. The best performing gold stock ETF, GDX, has lost 2.7%. The worst gold stock ETF, the Global X Gold Explorers ETF (NYSEARCA:GLDX), is down 20.2% in 2012. The disparity of returns in this group is a continued theme that has been in place the last few years for gold stocks. Here’s a snapshot of the gold stock ETF performance grid from GoldETFs.biz.
With the approaching fiscal cliff, potential flare ups in the European debt crisis and an increasingly tense dynamic surround Iran, gold seems to be positioned well going forward. Gold’s QE3 rally this summer and early fall showed its upward potential during catalyst events and it appears likely that one or more may be a reality soon.
Christian Magoon is Publisher of GoldETFs.biz and IndiaETFs.com. He is also CEO of Magoon Capital, a strategic consultant firm to asset managers. Christian Magoon is an ETF insider, having launched over 40 ETFs in the United States to date. A widely recognized thought leader on finance and market issues, Christian regularly contributes to many financial media outlets. Prior to forming Magoon Capital in 2010, Christian was President of Claymore Securities (now Guggenheim Investments), where he built one of the fastest growing and most innovative ETF businesses in the country, gathering more than $3 billion in AUM in three years. He launched more than 40 ETFs, introducing many “firsts” to the U.S. market, including the first Frontier Markets, Sector Rotation, Solar Energy, Timber, BRIC and suite of China focused ETFs. Christian consistently provides his industry insights and knowledge as a commentator in the U.S. media speaking publicly on macro investment issues and ETF related topics. Follow him on Twitter @ChristianMagoon. In 2008, he was named by Institutional Investor News as one of the five people to watch in the U.S. ETF marketplace. In 2011,Financial Planning magazine dubbed Christian an “ETF Pioneer.”