Kitco (News) - One of the world's largest fund managers is taking a step back in the precious metals market, and some analysts consider this to be a lightning bolt twice and perhaps a sign that the market has bottomed out. Gilburt said he suspects Vanguard made the switch because it was receiving pressure from its investors, who were tired of seeing losses in gold and silver. In 2001, Vanguard withdrew global gold from what was then its Vanguard Gold and Precious Metals Fund. He added that this “could explain why large-cap precious metal stocks have performed strangely underperform those of smaller companies.” While for some, Vanguard's latest move is the ultimate counteracting tactic, some analysts point out that the measure could have a negative impact on the mining sector in the short term.
Whatever your views on this barbaric relic, it's hard to ignore the sentiment that Vanguard withdrew precious metals from its Precious Metals and Mining Fund after gold fell almost to its exact low in May 2001.BOSTON (MarketWatch) — Vanguard Group announced Friday that it had reopened Vanguard International Explorer Fund and Vanguard Precious Metals and Mining Fund to new shareholder accounts. The Fund seeks the revaluation of capital in the long term by investing mainly in equity securities of companies in the gold and precious metals industries. NEW YORK (MarketWatch) - Vanguard Group's decision to reopen two of the six funds it had closed to investors is a sign of the effects of market turmoil. Using the ProBunds Precious Metals UltraSector fund to bet on gold is the stupid investment of the week, despite the potential of the underlying assets.
However, some analysts and traders question the timing of the movement and this could be a sign that negative sentiment in the precious metals sector is at an extreme point.