The VanEck Vectors Gold Miners ETF (NYSEArca: GDX), the largest exchange traded fund dedicated to gold mining stocks, rose more than 11% in 2017 while the VanEck Vectors Gold Miners ETF (NYSEArca: GDXJ), the second-largest exchange traded fund tracking gold miners equities, gained over 8%.

The bulk of the gains for GDX and GDXJ arrived in the fourth quarter, perhaps signaling that investors are comfortable betting the major gold miners funds will start 2018 on strong notes. GDX is comprised of global gold miners, with a notable tilt toward Canadian and U.S. mining companies. Stock fundamentals like cost deflation across the mining industry, share valuations below long-term average and rising M&A are all supportive of the miners space as well, but those fundamentals could be glossed over if the dollar strengthens.

“The bears had multiple opportunities in 2017 to push the miners lower but the miners held above their December 2016 lows and maintained the 62% retracement of the 2016 surge,” reports ETF Daily News. “The miners did not break out in 2017 but they held key support multiple times and the latest rebound suggests selling power has dried up.”

Gold has enjoyed greater demand in a low interest-rate environment as the hard asset becomes more attractive to investors compared to yield-bearing assets. However, traders lose interest in gold when rates rise since the bullion does not produce a yield.

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