2013 was a horrendous year for gold bugs as a strong equity market and taper fears kept demand for precious metals subdued. Prices for the metal were down double digits, while some miners approached a 50% loss in the time frame (see all the Precious Metal ETFs here).
However, 2014 has been a completely different story as an emerging market crash and concerns about the economy have acted as a catalyst for gold prices. In fact, the start to this year has seen gold easily outperform the market, with some calling for more gains should the economy stay rocky.
As equity long/short hedge funds have struggled this year, managed futures funds have been able to capitalize on market volatility and generate some of the best returns in the hedge fund industry. The managed futures sector refers to funds known as commodity trading advisors, or CTAs, which generally use a proprietary trading system to trade Read More
In terms of the gains, the SPDR Gold ETF (GLD – ETF report) has actually added about 6% YTD, helping to put the commodity fund into the positives for the trailing three month time frame. Meanwhile, gold mining ETFs have performed even better, with the broad Market Vectors Gold Mining ETF (GDX – ETF report) adding roughly 17% and the small cap-focused Market Vectors Junior Gold Miners ETF (GDXJ – ETF report) soaring by nearly 30% on the year.
It is hard to say if this trend can continue, but emerging market factors seem to be favoring gold (see all the Top Ranked ETFs here). However, if the U.S. economy does pick back up, it could spell trouble for gold’s mini run to start 2014. For more on this space though, make sure to watch our short video on the subject below: