But, as every fan of reality shows about gold miners knows, there's more to running a mining operation than just the price of gold. A little back-of-the-envelope math shows that.
Correlating the daily prices of the SPDR Gold Shares ETF (the GLD, which tracks gold prices) and the Market Vectors Gold Miners ETF (the GDX, comprised of a basket of gold miners) shows about 64% correlation after adjusting for dividends. That means gold miners moved up two days for three days gold moved up. And, vice versa.
So, while the GLD is down 16% this year, the miners are down over 30%. What do recent gold prices mean for gold miners?
We asked Talking Numbers contributors Abigail Doolittle, Technical Strategist at The Seaport Group, and Steve Cortes, Founder of Veracruz TJM, where they think gold is headed next. To hear what think, watch the video above.
[Disclosures: Abigail Doolittle follows the Market Vectors Gold Miners ETF (GDX) and maintains a buy rating with a $36 price target. Neither she nor The Seaport Group maintains a position in the Market Vectors Gold Miners ETF (GDX).]
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