How The World’s Top Gold Mining Stocks Performed In 2020

There are some ground rules which dictate how the index is weighted to ensure the GDM and GDX properly reflect the gold mining industry.

Along with the rules on the index’s weighting, there are company-specific requirements for inclusion into the GDM, and as a result the GDX:

  • Derive >50% of revenues from gold mining and related activities
  • Market capitalization >$750M
  • Average daily volume >50,000 shares over the past three months
  • Average daily value traded >$1M over the past three months

Gold mining stocks already in the index have some leeway regarding these requirements, and ultimately inclusion or exclusion from the index us up to the Index Administrator.

What 2021 Will Bring for Gold Mining Stocks

The GDX has had a muted start to the new year, with the index at -2.3% as it has mostly followed spot gold’s price.

Gold and gold mining stocks cooled off significantly following their strong rally Q1-Q3’2020, as positive developments regarding the COVID-19 vaccine have resulted in a stronger-than-expected U.S. dollar and a rise in treasury yields.

This being said, the arrival of new monetary stimulus in the U.S. could spur inflation-fearing investors towards gold and gold mining stocks as the year progresses.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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