The NYSE Arca Gold BUGS Index is a modified index with equal dollar weighting for companies involved in gold mining. BUGS stands for Basket of Unhedged Gold Stocks. It is also known by its trading symbol HUI. The HUI Index and Philadelphia Gold.
The NYSE Arca Gold BUGS Index currently consists of 15 of the largest and most publicly traded gold production companies. Funds invest directly in gold ingots or gold futures contracts, unlike companies that extract the metal. Investors use the HUI-Gold ratio to illustrate the ever-changing relative strength of gold stocks versus gold. While gold reached nearly record highs in March after Russia's invasion of Ukraine, the precious metal collapsed when Federal Reserve rate hikes to control inflation brought two-year Treasury bonds to their highest level in 15 years, attracting investors instead of gold.
The HUI Index and the Philadelphia Gold and Silver Index (XAU) are the two most watched gold indices in the market. The main difference between them is that the HUI index only takes into account the stocks of gold producers, while the XAU index includes both gold and silver producers. The Kitco gold index has one purpose: to determine if the value of gold is real, is it a reflection of changes in the value of the US dollar, or a combination of both. They are the microETF iShares Gold Trust, the GraniteShares Gold Trust and the ETF open Physical Gold Shares, which have overcome the 7% drop in the Bloomberg gold sub-index and the 19% drop in the S%26P 500 index in November.
The HUI-Gold ratio is an expression that compares the relative amounts of the NYSE Gold BUGS index and the price of gold. For investors who expect gold to continue to rebound as the Fed's rate hikes decrease, three better-performing ETFs offer exposure to the precious metal, as a key gold index rose 9% since early November.