A Unique Precious Metals Exchange Traded Fund is Launched Under a Cloud of Worry

On May 22nd a new metals based ExchangeBarrick Gold 8.50
Traded Fund began trading on the Amex (GDX).AngloGold Ashanti 7.51
The new Market Vectors - Gold Miners ETF wasGoldcorp 6.53
launched by the Van Eck Global firm and tradesGold Fields 6.50
under the ticker symbol GDX. Those who followFreeport-McMoran 6.16
the Exchange Traded Fund Industry are likely toGlamis Gold 4.97
be aware of streetTRACKS Gold (GLD), iSharesHarmony Gold 4.37
Comex Gold Trust (IAU) and iShares Silver TrustKinross Gold 4.06
(SLV). All these funds have come into being withBuenaventura 3.72
a great deal of fanfare. This new fund whichWith the recent downturn in gold and silver stocks
tracks the Gold Miners Index happened to have, much of the thunder was taken out of the
been launched during one of the most precipitouslaunch of the GDX. This fund had the unfortunate
drops in precious metals prices seen in years. Noluck to be released for trading during a period in
wonder why you may have missed its launch.which the precious metals have seen their
Its' downplayed launch was too bad, especiallygreatest setback in years. The most popular of
because the Gold Miners ETF is the only one ofthe Gold ETF's streetTRACKS GLD has been
its kind in the US. Though it is related to thetrading at a volume of 10 to 20 million shares for
precious metals industry, it is much diferent thenmost of May. The Gold Mining ETF, GDX, has
the GLD, IAU, and SLV Funds, which are all basedtraded at a volume of 200,000 to 600,000 shares
on the prices of either silver or gold. This is ain its first week. GDX, which is a broader based
very narrow focus, much more like investing infund then GLD, may have easily traded at a
commodities then in equities.much higher volume its first week, if it wasn't for
The Amex Gold Miners Index, is the firsta steep downturn in precious metals.
exchange-traded fund in the U.S. offeringThe question now is it a good time to buy this
investors exposure to the gold-mining equitynew ETF? The Gold Mining Index which this new
market, as opposed to just the metal itself. ThisExchange Traded Fund is based on, has just
is more broad based for investors and is baseddropped from 1200 to 1000 in one week, a big
on equities in the industry not commodity prices.drop for an index of stocks. A bounce here is
The new ETF may present more opportunities tolikely. There was a great deal of speculation in
benefit from volatility, as mining-related sharesgold. Even if this is the bottom, it will take some
tend to move more dramatically than overalltime before Gold prices begin to recover from
bullion. Another key difference is that, unlike GLD,their recent plunge. Keep a close eye on the
the GDX is optionable. The top ten holdings in thistrading volume for GDX to see if institutional
new ETF are:investors begin moving into this fund.
Newmont Mining 13.51