Three new sector seasonalities begin in the month of July. One is for gold and silver mining stocks. This seasonality is based upon strength in the Philadelphia Gold & Silver Index that typically begins in late July and lasts until late December. The VanEck Gold Miners ETF (GDX) is our preferred ETF to take advantage of seasonal strength, explains Jeff Hirsch, editor-in-chief of The Stock Trader’s Almanac.
Over the past 10 years, this trade has struggled. But more recently in the last five years, it has averaged 7.35%. With September rate cut odds rising on last week’s better-than-expected CPI report, gold, silver, and miners were all solidly higher last week.
(Editor’s Note: Jeff Hirsch is speaking at the 2024 MoneyShow Masters Symposium Sarasota, which runs Dec. 5-7. Click HERE to register)
As of the close on July 10, GDX had over $14 billion in assets with an expense ratio of 0.51%. Top five holdings include: Newmont Corp. (NEM), Agnico Eagle Mines Ltd. (AEM), Barrick Gold Corp. (GOLD), Wheaton Precious Metals Corp. (WPM), and Franco-Nevada Corp. (FNV).
After spending much of June consolidating earlier gains, GDX just broke out to new highs. Stochastic, relative strength, and MACD indicators are all positive and trending higher.
We will also look at the SPDR Gold Shares ETF (GLD). Like the miners, physical gold enjoyed solid gains last week and GLD is on the verge of breaking out to a new high. After consolidating throughout June, GLD has reclaimed its 50-day moving average and appears to be regaining upside momentum with Stochastic, relative strength, and MACD indicators positive and trending higher.
Recommended Action: Buy GDX and GLD.