Gold may be the best performing asset class of February but precious metals miners and sector-related exchange traded funds capitalized on the bullion rally.
The SPDR Gold Shares (NYSEArca: GLD) gained 9.4% over the past month, with Comex gold futures now trading around $1,234.2 per ounce.
Gold strengthened in February and is on course for its largest monthly gain since January 2012 as market volatility triggered greater safe-haven bets, reports Jenny Cosgrave for CNBC.
Investor demand for gold has also helped gold-related ETFs grow. Holdings in ETFs have increased tot he highest level in almost 17 months, attracting 3.9 tons of gold to 1,682.6 tons on Friday. GLD’s holdings have increased to around 762 tons as of Friday.
“Precious metals saw very large inflows over the last month as negative rates and the prospect of a more dovish (U.S. Federal Reserve) make this zero-income safe haven asset more attractive,” Ramin Nakisa, a strategist at UBS, told CNBC.
With precious metals prices bouncing off six-year lows, gold and silver miners are finally turning around.
The PureFunds ISE Junior Silver ETF (NYSEArca: SILJ), which tracks small-cap silver miners, was the best performing non-leveraged ETF of February, surging 34.2% over the past month.
Additionally, over the past month, the iShares MSCI Global Silver Miners ETF (NYSEArca: SLVP) jumped 32.0%, iShares MSCI Global Gold Miners ETF (NYSEArca: RING) increased 34.1%, Sprott Junior Gold Miners ETF (NYSEArca: SGDJ) advanced 29.8%, PowerShares Global Gold and Precious Metals Portfolio (NasdaqGS: PSAU) gained 29.6%, Global X Silvers Miners ETF (NYSEArca: SIL) rose 25.9%, Market Vectors Gold Miners ETF (NYSEArca: GDX) returned 32.1%, Sprott Gold Miners ETF (NYSEArca: SGDM) was up 29.2%, Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) was 31.1% higher and Global X Gold Explorers ETF (NYSEArca: GLDX) added 27.9%.
“That is not my favorite area to sell right here. I think near-term as a trade gold miners continue to work” Ari Wald of Oppenheimer told CNBC, arguing that miners are a better play than the precious metals after the mining sector’s underperformance relative to the commodity recently reversed.
Max Chen contributed to this article.