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Precious metals have been at the forefront of the commodities’ space for the last several years. Gold and silver performance over the since the start of 2024 has been remarkable with gains of 123% and 201%, respectively. Compared to the S&P 500 Index’s (SPX) return of 38%, it’s easy to see why precious metals gained so much attention. Focusing on gold, its run higher was nearly unabated until the end of January. Pullbacks were mild and short-lived, but we have undoubtedly seen a change in character over the last few weeks. This could very well be due to derisking across assets as the conflict in Iran is approaching its fourth week, but it should be noted for those that may have significant allocations to precious metals. While the performance for the SPDR Gold Trust (GLD) has not been good of late, it is still in the black for the year with a return of 7.59% and has an outstanding fund score of 5.50. So, all is not lost for precious metals investors. However, recent movement should raise some eyebrows simply due to the different nature of movement than what has been the case for some time. A few major support levels to watch on GLD are $400, $370, and $365. In addition to support, keep a close eye on GLD’s fund score for any deterioration as it has not had a fund score below 3.0 since November 2022.

While the underlying commodity still has strong long-term technical readings, gold miners have deteriorated considerably in the month of March. The VanEck Gold Miners ETF (GDX) fell 28% so far in March and its near-perfect fund score has dropped below the acceptable 3.0 threshold. Along with a string of three consecutive sell signals a break into a negative trend, the technical picture is concerning at best. GDX is trading near support and has a heavily overbought/oversold reading of -76%, so there are conditions for a bounce. Nonetheless, the evidence suggests avoiding exposure to gold miners currently. The big question is if the miners are a leading indicator for the commodity itself. GLD and GDX have a monthly correlation of 0.92 over the last three years, so they are usually moving in the same direction. While the two have moved closely together, GDX has about 2.5x the rRisk as GLD, so it is much susceptible to big swings in both price and fund score. In the big picture, it seems better to put more weight on the state of gold rather than the miners, but they are still worth watching, especially if you have any allocation to gold.

Monday’s Daily Equity Report highlighted the recent deterioration in growth, represented by the Vanguard Growth ETF (VUG), along with continued improvements in value on a relative-strength basis and strong long-term trend indicators. To expand on the evidence of value’s improvement and current strength, the graphs below show the group score history of the All Value Funds and All Growth Funds on the Asset Class Group Scores page.

March trading has seen the gap between the All Value and All Growth funds eclipse 0.60 on various days, marking the widest margin since late 2022 and early 2023. This difference follows rarefied territory reached from early December through the end of January, when both groups scored above 4 for the first time in the groups’ roughly 22-year history. The recent resurgence of the All Value Funds group above the 4 threshold and into “blue sky” territory marks the first time in 19 years that the group has shown this level of superior trend and relative-strength characteristics.

The snapshot below shows the top 25 asset groups ranking above All Value Funds on the Asset Class Group Scores page and highlights some of the smaller groups contributing to All Value’s current stature. Looking back to prior instances in the mid-2000s when All Value scored above 4, there are loose parallels to the groups currently supporting All Value. Leadership from international equities, along with rising energy strength (both in domestic equities and commodities), are two notable themes, while strength in Utilities adds another level of commonality.

Looking at the group score history of the All Value Funds, there are five notable periods in which the group remained above the 4 threshold for more than a week. Across these periods, All Value scored above 4 for an average of 77 trading days—slightly more than a quarter, assuming roughly 250 trading days per year. The longest period ran from August 2006 to March 2007 (143 trading days), or a little over six months.

The tables below show the forward performance of the Vanguard Value ETF (VTV) and the iShares EAFE Value ETF (EFV) following the five periods referenced above, when the All Value group’s score eclipsed 4. Short-, intermediate-, and long-term performance for both funds was positive overall, with the 12-month window the only horizon that included a negative instance, which encompassed early 2008. Given that there are only a handful of observable periods when All Value is above 4, there is limited additional insight to draw beyond the loose parallels in leadership noted above.

Since moving above the 4 threshold on December 3 of last year, the All Value group has remained above the threshold for more than 70 trading days, just shy of the average noted above. Since early December, VTV and EFV have gained 3.09% and 3.85%, respectively, and are up 2.63% and 2.87% year to date. From here, the All Value Funds group would need to sustain a score above 4 for roughly another 73 trading days to surpass the longest streak (late 2006 to early 2007) and push the leadership trend further into rarefied territory.

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