Week in Review 2/9 – Gold Closes over $670/oz

It was a great week in the commodity patch Gold, Silver, Copper and Oil were up 3.2%, 4.0%, 3.9% and 1.5% respectively for the week.  Gold and Silver are quietly off to an excellent start this year.  Silver is leading the charge (+7.3%) with Gold right behind (+4.6%).  Interestingly the Gold and Silver mining companies aren’t coming along for the ride.  Take a look at these two charts.

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The gold bullion ETF(GLD) has surpassed its December highs, while the Gold Miners ETF (GDX) still has work to do.  This is the opposite behavior of a Gold bull market.  The miners historically lead the metal.  I think that there are several reasons why this is happening. 

Since the introduction of GLD, it has become an excellent way to attain exposure to gold without taking on the additional risks associated with mining companies. So, investors are favoring GLD over of the mining companies. Also when stocks in general sell off, mining stocks are being thrown out with the bath water.  Friday was a perfect example.  The S&P 500 was down -0.7%. GDX followed the S&P 500 by closing down -0.4%.  Instead of following its underlying commodity (GLD) which was up +0.9%.  When the bull market in gold is recognized by the masses, this type of divergence will not happen.

So, how did our stocks fare this week?

Fab 4:

The Fab Four, from the article “The Commodities Bull Market is Back”, was up 1.1% for the week.  It was led by BHP’s gain 5.4% (read for more details).  Hud Bay Minerals chipped in a +3.3% week.  PBR tried to spoil the party (-4.1%) and PCU decided not to show up (-0.1%). For the year, the Fab Four is outperforming the S&P 500 4.1% vs. 1.4%.

BBO:

Was down 0.6% for the week.

BRIC:

Has fallen and can’t get up.  It is down 5% for the year.

Real Money:

Great week up 2.6%.  Read here for details.

Here are the rest of the regulars:

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SOX – Semiconductor Index
CEF – Gold and Silver Bullion ETF
CRESY – Argentine Beef, Grain and Farmland
GDX – Gold Mining Stocks ETF
GLD – Gold Bullion Exchange Traded Fund (ETF)
PHO – Water Resources ETF
USO – Oil ETF
BBO (Big-Build Out) – basket of 12 stocks critical to the industrialization of BRIC
BRIC – basket of 4 country ETFs: Brazil, Russia, India and China
Real Money – actual trades from one of my portfolios

Refer to the following links for more information on above stocks and portfolios:

GDX, CEF: Link
USO: Link
BRIC, BBO: Link
PHO: Link
Real Money: Link

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