Top Mining ETFs of 2012 Show Surprises

Published on Thursday, 19 January 2012 22:16 Written by Todd Shriber

New York, January 19^th (TradersHuddle.com) –  One of the most prevalent themes faced by precious metals investors in 2011 was the fact that gold miners and the ETFs that track them lagged bullion’s spot performance in a big way. When gold was soaring, miners were left behind. And when the yellow metal plunged into year-end, miners were certainly not immune from those declines.

To put things into perspective, in the past year the iShares Gold Trust (NYSE: IAU) is up almost 21%. Barrrick Gold (NYSE: ABX) is flat over the same time. That’s just one example of a miner’s underperformance relative to gold. We could go on and on from there, but the point has been made.

To that end, it might be a relief to mining bulls to see mining ETFs perking up in 2012. The Market Vectors Gold Miners ETF (NYSE: GDX), which tracks large-cap miners such as Barrick, Goldcorp (NSYE: GG) and others, is still a laggard and is in the red on the year following a 2% drop on Thursday. However, the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) is up about 8% year-to-date.

The more obscure Global X Pure Gold Miners ETF (NYSE: GGGG) is up almost 7% year-to-date while the Global X Silver Miners ETF (NYSE: SIL), currently the only ETF exclusively devoted to silver miners, is up almost 6.2%.

Talking technicals, it pays to be somewhat cautious with the quarter of ETFs that we just mentioned as all of them remain below their 200-day moving averages by healthy margins. Same goes for the First Trust ISE Global Platinum Index Fund (NASDAQ: PLTM), which is more than 18% below its 200-day line. Still, PLTM is up more than 10% year-to-date and doesn’t face much in the way of material resistance until it gets back to its 200-day line.

Be advised that PLTM isn’t a pure platinum play. Its constituents also have exposure to metals such as palladium, osmium, iridium, ruthenium and rhodium.

In what may be a surprise to some, the most bullish of the equities-based metals mining ETFs this year doesn’t come from courtesy of precious metals. The most impressive performance belongs to an ETF that is all about Dr. Copper and that fund is the Global X Copper Miners ETF (NYSE: COPX), which we highlighted earlier this week in advance of Freeport McMoRan’s (NYSE: FCX) fourth-quarter earnings report.

Shares of Freeport were slightly lower on Thursday, but COPX was higher by over 1% and is now up almost 15% in 2012. In a perfect world, China’s economic data would remain robust and COPX will take out resistance at $15.50; that combination could set the ETF up for a run to $19 or higher.