Benchmarking the HUI versus the XAU

There are two gold and silver miners indices frequently referred to:

1. Philadelphia Gold and Silver miners index with ticker ^XAU   (data since Dec 19, 1983) and
2. the AMEX Unhedged Gold Bugs Index with ticker ^HUI (data since Jun 04, 1996)

In a previous posting, I have been checking the long term performance of the present components of the HUI index. Today's focus is on benchmarking the HUI versus the XAU.

In both cases the past reference date has been July 31, 2002. There are data for all present HUI components going back to that date. For the present XAU components this is not the case: Silver Wheaton started quoting on TSX only by end 2004 and on the NYSE only in 2005. The long-term performance over nearly a decade of the HUI is 4.750, meaning that $1 turns into $4.75 over this period. For the ^XAU the long term performance is 3.086. The ^HUI outperforms the ^XAU by an aggregated of 53.9% or an annualized 4.6%.

Miners continue their downward spiral

Precious metals miners are unable to change momentum: despite a recovery of both the gold and silver price on Maudy Thursday (April 5), both our GMP-list based indices continued their slide, with a third consecutive low for the gold miners index. The silver miners index also sets down a fresh low, however the previous one dates back to Dec 28, 2011. No better news for the equal weight index – which is a decent proxy for the junior performance – with equally a fresh low since Dec 28, 2011.

With the cap-weighted gold miners index now at 723, the index has shed 27.7% since it started off on November 19, 2010. Over the same time frame, gold is up 21.6%. The silver miners index lost 19.4% over this time frame, however silver rose 30.8%. (See also the graphs on the blogpage in http://gwyde.blogspot.com/p/gold-miner-pulse.html)

The situation hasn’t improved at all in 2012: with gold still up 4.1% year-to-date (despite repeated sell-offs) and silver up 13.9%, the gold miners index lost 11.2% and even the silver miners index is down 4.5%.