Gold Funds Jump on Record Prices

On Thursday, the price of gold set a new all time high of $958.40 per ounce. The average precious-metals fund we track climbed 5.81% for the five trading days ending Feb. 21.

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Source: Bloomberg

The higher price for gold boosted the fourth-quarter performance, before one-time charges, for the largest gold miners Barrick Gold (ABX Quote), Newmont Mining Corp(NEM Quote) and Goldcorp (GG Quote) above analyst estimates.

All of these are holdings of ProFunds Precious Metals UltraSector ProFund(PMPIX Quote) PMPIX, which jumped 11.93% for the period under review. This open-end fund is leveraged 150% to the mining shares in the Dow Jones Precious Metals Index. Of the top ten members of the index, the biggest winners were Harmony Gold Mining(HMY Quote), up 19.84%; Gold Fields(GFI Quote), up 15.65%; and Goldcorp(GG Quote), up 12.48%.

In second place is ASA Ltd(ASA Quote), a closed-end, gold mining share fund up 7.77% for the week. A close third place goes to GAMCO Gold Fund(GOLDX Quote) earning a total return of 7.54%. GAMCO's best performing holdings include New Gold(NGD Quote) up 36.96%, Gammon Gold(GRS Quote) up 32.40%, and Harmony Gold Mining up 19.84%.

Best Performing Precious Metals Funds
Ranked by returns for the week ending February 21

Fund	Ticker	Rating	Fund Type	1 Week Total Return
ProFunds Precious Metals UltraSector ProFund	PMPIX	C-	Open-End	11.93%
ASA Ltd	ASA	C+	Closed-End	7.77%
GAMCO Gold Fund Inc	GOLDX	C+	Open-End	7.54%
DWS Gold & Precious Metals Fund	SCGDX	C	Open-End	7.22%
Midas Fund	MIDSX	B	Open-End	7.20%
Rydex Series - Precious Metals Fund	RYPMX	C+	Open-End	7.06%
American Century Global Gold Fund	BGEIX	C+	Open-End	7.01%
RiverSource Precious Metals and Mining Fund	INPMX	C-	Open-End	6.98%
Market Vectors Gold Miners ETF	GDX	B+	ETF	6.95%
Van Eck International Investors Gold Fund	INIVX	C	Open-End	6.72%

Source: Bloomberg.
For an explanation of our ratings, click here.

The ING Global Natural Resources Fund(LEXMX Quote) underperformed this week due to a share allocation of 51.5% oil and gas, 21.0% mining, and 14.8% oil & gas services. Last week, when crude oil topped $100, was the time to be concentrated in "black gold." This was the week for yellow gold.

As usual, the bullion funds directly tracking the price of precious metals lagged the leverage performance of the mining shares.

Worst-Performing Precious Metals Funds
Ranked by returns for the week ending February 21

Fund	Ticker	Rating	Fund Type	1 Week Total Return
ING Global Natural Resources Fund	LEXMX	B-	Open-End	2.55%
Gabelli Global Gold Natural Res & Inc Trust	GGN	B+	Closed-End	2.68%
PowerShares DB Silver Fund	DBS	A+	ETF	3.32%
iShares Silver Trust	SLV	B-	ETF	3.56%
PowerShares DB Precious Metals Fund	DBP	A+	ETF	3.88%
Streettracks Gold Trust	GLD	A+	ETF	3.95%
iShares COMEX Gold Trust	IAU	A+	ETF	3.96%
PowerShares DB Gold Fund	DGL	A+	ETF	3.97%
SPDR S&P Metals & Mining ETF	XME	B+	ETF	4.05%
US Global Investors Gold and Precious Metals	USERX	B	Open-End	4.76%

Source: Bloomberg.
For an explanation of our ratings, click here.

The U.S. dollar seems poised to return to its long-term downward trend against the major world currencies. As that happens, I would not be surprised to see gold top $1,000 per ounce over the next year.