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.
ADW Capital’s 2020 letter: Long CDON, the future Amazon of the Nordics
ADW Capital Partners was up 119.2% for 2020, compared to a 13.77% gain for the S&P 500, an 11.17% increase for the Russell 2000, and an 8.62% return for the Russell 2000 Value Index. The fund reports an annualized return of 24.63% since its inception in 2005. Q4 2020 hedge fund letters, conferences and more 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: