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Market Vectors Gold Miners ETF Message Board

  • cmegladon cmegladon Sep 26, 2013 4:51 PM Flag

    Does GDX follow the price of Gold? Nope. Should it? Nope

    Many here confuse GDX with Gold.
    GDX is an ETF made up of mining stocks.
    Mining stocks do indeed participate in PM "trends", often "leading" rather than following.
    IMO, trust that if the trend in PMs is going higher, GDX will pop higher.
    If the trend is lower, GDX will drop.
    It often is an exaggerated move on the trend.
    Also, if PMs have settled into a range, the underlying stocks in GDX will often act jumbled and move on their own, following or leading the whims of analysts or quarterly window dressing of funds.
    But you should NOT ever be surprised when they move in what looks like opposite directions.
    They don't really.
    Now 2 or 3x ecn or etf's are a whole other story.
    There, you are also dealing with underlying assets such as options and derivatives that mimic the trends.
    And they have a built in decay that over time MUST erode the PPS in relation to underlying asset classes. Thus, they are only for day or swing trading
    Just my op.
    PS: I am long many miners and physical Gold and Silver.
    I trade NUGT and GDX

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