This is one of the most valuable precious metals indices in the world. The index consists only of gold mining companies that do no hedge their production beyond a year and a half. This, on the other hand, gives the HUI Gold Index substantial exposure to short-term movements in gold prices.
Further, the HUI Gold index is also known as Amex Gold BUGS – Basket of Unhedged Gold Stocks Index. Moreover, the HUI Gold Index includes sixteen gold mining companies (only gold stocks!). For example, Newmont Mining Corporation, Barrick Gold Corporation, Goldcorp Inc., and Iamgold Corporation are among these companies.
Furthermore, the Amex Gold BUGS Index trades on the New York Stock Exchange – NYSE, under the symbol HUI. The Amex Gold BUGS Index is a modified equal-dollar weighted index. In other words, all components carry equal weight.
In general, the HUI Gold Index can respond to changes in the market. Also, the index has the right to add or remove companies from the index, which is adjusted quarterly.
Nowadays, investors use this ratio to illustrate the relative strength of the gold stock vs. gold. In other words, the ratio compares the relative quantities of the NYSE Gold BUGS Index and the price of gold. Also, the calculation itself is simple. The value of the NYSE Gold BUGS Index must be divided by the price of gold.
Moreover, the HUI-Gold ratio can provide information to use in your trading analysis. So, if you want to invest in gold or gold mining, then the HUI Gold Index might help you.