HUI -The Amex Gold Bugs Index Explained

June 4, 2010 | By | Reply More

Gold IngotThe HUI Index otherwise known as the Amex Gold Bugs Index is an index of companies involved in gold mining and whose hedging of their gold production is confined to periods of 18 months or less.

Meaning that the miners contract to sell future production at a guaranteed price, a common practice in commodity trading in order to level out price fluctuations so maintaining a profitable level of operations for the duration of the futures contracts.

In the case of the HUI Index, because the hedging activity of its component miners is either non-existent, very short term or only a small proportion of their total gold production, it provides a short-term indication of the movement in gold prices.

The HUI index was launched in 1996 with a base value of 200. It may add or delete one or more stocks at any time and the equal US dollar weighting of the component stocks can also be adjusted at any time.

Rebalancing the portfolio takes place every quarter on the third Friday of March, June, September and December.

As of today, 4th June 2010, the index consists of fifteen leading miners as follows: –

  • Barrick Gold (ABX)
  • Agnico Eagle Mining (AEM)
  • AngloGold Ashanti (AU)
  • Yamana Gold (AUY)
  • Compania Mina Buenaventura S.A. (BVN)
  • Coeur d`Alene Mines (CDE)
  • Gold Fields Ltd. (GFI)
  • Goldcorp (GG)
  • Randgold Resources (GOLD)
  • Hecla Mining (HL)
  • Harmony Gold (HMY)
  • Iamgold Corp. (IAG)
  • Kinross Gold (KGC)
  • Lihir Gold (LIHR)
  • Newmont Mining (NEM)

The HUI Index is traded on the New York Stock Exchange under the symbol HUI. At the close of trade on Thursday 06/03/10 the price was $454.35.

A commonly used indicator to anticipate trends in the gold price is the HUI/Gold ratio.
The Philadelphia Gold And Silver Index (PHLX:XAU) is based on a similar principle and is also a closely observed indicator and tradable index used by precious metal bugs.

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Category: Gold

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