In this piece, we will take a closer look at the Philadelphia Gold and Silver Index.
What is it?
The Philadelphia Gold and Silver Index is among the most recognised and respected stock indexes when it comes to mining companies specialised in precious metals such as gold and silver, together with the NYSE Arca Gold BUGS Index. It was launched in 1979, and you can find it on the board in the stock market as “XAU”. It shows the thirty most essential mining companies on the market. The symbol “XAU” shouldn’t be confused with another similar and commonly used symbol - “XAU/USD”, which represents the price in US Dollars of one troy ounce of gold.
Keep in mind, this is an index of the shares of gold and silver mining companies, not for the actual metals. This is important because the prices of the stocks are not always perfectly correlated with the prices of the metals themselves.
Some of the companies that are included in the index are the Barrick Gold Corporation, New Gold Inc, Pan American Silver Corporation, Wheaton Precious Metals Corporation, and other well-known companies in the gold and silver market.
Importance of the Philadelphia Gold and Silver Index
One of the differences between the Philadelphia Gold and Silver Index and the NYSE Arca Gold BUGS Index is that the first one includes in the list those gold producers that would cover the total of their sales by making forward sales. This feature of the Philadelphia Gold and Silver Index gives traders an upper hand in the stock market; it provides a more detailed index of the mining companies and correlates the prices of gold and silver in USD.
For those traders that wish to know where they should make their investments, this index becomes the perfect tool. The investor can use it to compare the index charts and signal indicators with the ones on the portfolio. It also gives the option to the traders to see if it is more convenient for them to trade using the index or an ETF (Exchange-Traded Fund).
Like many other tools you may find in the market, the Philadelphia Gold and Silver Index is handy if it is used correctly. Traders and investors should always compare the information of these financial tools before reaching a decision. That way, they can reduce the risks and put their money on trustful stocks that may double and triple their investments.
This tool allows the traders in precious metals mining companies to foresee how the stocks of these companies will react in the coming weeks and months, strategically placing trades to raise their wealth. If you are new in the trading market, you should investigate more about the mining companies you wish to invest in and use the index to compare.
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