Precious mining stocks lagged in 2023 despite stock market rally
In 2023, precious mining stocks found themselves largely sitting out the stock market rally that took place. While the broader stock market experienced significant gains, mining stocks failed to keep up. Not only did they lag behind the stock market, but they also underperformed the price of gold. The VanEck Gold Miners ETF (GDX) rose a mere 8.2% in 2023, whereas the price of gold climbed over 13%. The VanEck Junior Gold Miners ETF (GDXJ) performed even worse, with a meager 6.3% increase. This underperformance raises questions about the future of precious mining stocks and whether they can rebound in the upcoming year.
Technical analyst predicts bounce for mining stocks in 2024
According to technical analyst Carter Worth, 2024 could finally be the year for precious mining stocks to experience a much-needed bounce. Worth, the founder and CEO of Worth Charting, expressed his belief that mining stocks are currently out of favor and under-owned. He suggests that taking the road less traveled and investing in these stocks could prove to be a wise decision. Mining stocks have historically been perennial underperformers, but Worth sees potential for a turnaround in the coming year.
Underperforming mining stocks show potential for catch-up move
The underperformance of mining stocks in 2023, especially relative to the price of gold, creates an opportunity for a catch-up move. The spread between mining stocks and gold is currently quite extreme, according to Worth. He believes that gold itself is poised to increase in value, which would benefit mining companies and potentially lead to a surge in their stock prices. This catch-up move could be a turning point for mining stocks, allowing them to close the gap and potentially outperform in 2024.
Analyst recommends GDX fund for mining stock trade
Worth suggests using the VanEck Gold Miners ETF (GDX) to take advantage of the potential bounce in mining stocks. The GDX fund offers liquidity and is well-suited for this trade, given its $13 billion worth of assets under management and regular high trading volume of over 20 million shares. The fund’s top holdings include companies such as Newmont Corporation, Barrick Gold, and Agnico Eagle Mines. With an expense ratio of 0.51%, the GDX fund provides an accessible option for investors looking to capitalize on the potential rebound of mining stocks.
GDX fund offers liquidity and top holdings in mining sector
The GDX fund stands out as an attractive choice for investors due to its liquidity and exposure to top holdings in the mining sector. With a significant amount of assets under management and substantial daily trading volume, the fund provides ample liquidity for investors. Additionally, the fund’s top holdings, including Newmont Corporation, Barrick Gold, and Agnico Eagle Mines, offer exposure to some of the leading companies in the industry. This combination of liquidity and top holdings positions the GDX fund as a strong contender for those seeking to enter the mining stock trade in 2024.
In conclusion, although precious mining stocks experienced a lackluster year in 2023, there is potential for a significant bounce in 2024. Technical analyst Carter Worth sees the underperformance of mining stocks as an opportunity for a catch-up move and recommends the GDX fund for investors looking to capitalize on this potential rebound. With attractive liquidity and exposure to top holdings in the mining sector, the GDX fund presents a viable option for investors seeking to navigate the world of precious mining stocks.
Analyst comment
Positive news: The underperforming precious mining stocks in 2023 create an opportunity for a catch-up move and potential rebound in 2024. Technical analyst Carter Worth predicts a bounce for mining stocks and recommends the GDX fund as a suitable investment option. The GDX fund offers liquidity, exposure to top holdings in the mining sector, and an accessible expense ratio, making it an attractive choice for investors.
