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Direxion Daily Gold Miners Bull 3X ETF Message Board

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  • jacmiddle jacmiddle May 17, 2012 1:42 PM Flag

    16% gain in a few hours is insane

    Why GLD and GDX performance are so much different, I am so confused. Sorry for the novice question.

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    • Owning miners is like owning a leveraged play on the metals they mine. So, a 3x ETF on an already leveraged vehicle (miners) will give you maximum volatility. Any movement in gold will be wildly exaggerated by this ETF.

      If that's not enough, other dynamics come into play. Miners are companies. They have management issues, operational costs, labor costs, regulations, territorial issues, etc. So, if the majority of them can't get their act together for any multitude of reasons, the ETF still might underperform gold. But if times are good all around, miners can get pumped up even more than normal by speculators.

 
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