Another Troubling Day for Mining ETFs

ETF Trends

Already reeling from some dour November performances, precious metals mining ETFs have started the last month of the year in similar fashion to how they ended the previous month: Ugly.

The Global X Silver Miners ETF (SIL) is off 5.4% Monday. Struggling to stay above $11, a close below that level would SIL’s first since it debuted three and a half years ago. The Market Vectors Junior Gold Miners ETF (GDXJ) , which was reverse split earlier this year, is lower by 5.8%.  The big kahuna of the group, the Market Vectors Gold Mines ETF (GDX) , is off 4.4%. [Gold Mining ETFs not so Golden]

Monday’s losses for those funds come after they lost an average of 8.3% last month in what was the worst November for gold in three and a half decades. Making bullion’s decline last month all the more ominous is that November is usually one of the best months in which to be long gold, yet some major ETFs backed by physical holdings of gold dipped nearly 5% last month. [Relief for Gold Bugs?]

Losses accelerated for the mining ETFs in the back half of November. From November 14 through month end, GDX lost 9.3% while SIL slipped 9.5% from Nov. 14 through Nov. 26.

Indicating that silver and silver miners are providing no alternative to gold and gold miners, the iShares Silver Trust (SLV) is off 3.2% Monday after an almost 9% tumble last month. Since April 9, SLV is down 32%, easily putting the largest silver ETF deep into bear market territory.

Trading around $18.60, SLV is already hovering near its lowest levels since the third quarter of 2010. If $18 gives out, there is speculation silver futures and SLV could plunge to levels not seen since the first quarter of 2010. [Enthusiasm Lacking for Commodities ETFs]

iShares Silver Trust

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ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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