Tags: gartman | gold | miners

Gartman: Interested in Gold? Buy Miners, Not the Metal

Wednesday, 20 June 2012 08:12 AM

Trader Dennis Gartman, author of The Gartman Letter and well known for his expertise in commodities, says there's a shift in the gold trade.

“For the first time in a long time, I’d rather own the miners than bullion, or gold contracts or the GLD,” Gartman tells CNBC.

For the previous four to five years, even as the spot price has climbed to new highs, gold miners have deteriorated, says Gartman. 

Now, that's changed, he says.

“Over the past few weeks, as the gold market advanced, the gold equities—that is, large-cap gold miners—performed better than bullion,” Gartman explains.

“I watch that sort of thing to see how efficient and how well entrenched the gold rally is.”

 According to Seeking Alpha, gold miners ETF funds have been outperforming physical gold ETFs for over a month now.

“Perhaps it's because gold miners ETF products had been the victim of such a steep sell-off versus gold that contrarians stepped in to bet that the disconnect had to revert back to the mean,” writes contributor Christian Magoon, adding that the largest physical gold ETF, GLD, takes the bottom rung of this ranking, while mining-oriented products have soared.

However, Magoon notes, despite the surge in the performance of gold miners ETFs lately, these ETFs are still in negative territory in 2012 and have a dreadful one-year track record.

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Wednesday, 20 June 2012 08:12 AM
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