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Gold Sell-Off Hammers Miner ETFs


Gold dropping by more than $60 an ounce to under $1,500 at one point Friday dominated the headlines but miner ETFs continue to fall faster and harder than bullion prices.

Market Vectors Junior Gold Miners (GDXJ) was the worst-performing unleveraged ETF this week with a loss of 8% in afternoon trading Friday. Its large-cap sibling, Market Vectors Gold Miners (GDX), shed 7%.

“Few gold miners have been spared,” writes Nathan Vardi at Forbes. “Shares of big mining companies like Newmont Mining and Barrick Gold, down 17% and 30% respectively in 2013, are getting hit hard as the market takes a less sympathetic view of any operational hurdles they are facing. Barrick’s shares fell another 7% in Friday morning trading.”

GDX has more than doubled the loss of bullion-backed SPDR Gold Shares (GLD) the past six months. The gold miner ETF is off 38% during the period while GLD is down about 15%. [Gold ETF Lowest Since 2011 as Key Support May Crumble]

GLD was on track for a weekly decline of 5% as trading volume surged during Friday’s sell-off.

Turning to the major U.S. stock indices, the S&P 500 was poised for a gain of 2.1% for the week after reaching a new all-time high. The Dow rose 1.9% and the Nasdaq Composite advanced 2.7%

In next week’s economic data, look for reports on homebuilder confidence, consumer prices, housing starts, industrial production and the Fed’s Beige Book.

Market Vectors Junior Gold Miners


Full disclosure: Tom Lydon’s clients own GLD.

The opinions and forecasts expressed herein are solely those of John Spence, 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.