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Lackluster Gold Stock Among Worst to Own in September

·1 min read

Gold prices have struggled of late, just last week marking a sixth-straight loss to close at their lowest level since July. Hawkish comments from the U.S. Federal Reserve, in addition to rising Treasury yields, have kept the yellow metal below the psychologically significant $1,800 level. With the possibility of additional interest rate hikes becoming more likely, gold producer Newmont Corporation (NYSE:NEM) is suffering. Yet another reason to stay wary of the equity is that it appeared on a list of 25 worst performing stocks in September.

Worst September 2022
Worst September 2022

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, Newmont stock averaged a September loss of 4.1% in the past 10 years, and has finished the month with a positive return only twice. This makes the equity the third worst performer on the list.

Last seen down 1% at $42.38, the 30-day moving average has been guiding shares lower since their April bear gap. The security is pacing for its third-straight daily loss today, and earlier slipped to a fresh two-year low of $42.06. Year-to-date, NEM is down 31.5%.

NEM 30 DAY
NEM 30 DAY

 

An unwinding of optimism among options traders could create additional headwinds for the equity. NEM sports a 10-day call/put volume ratio of 6.26 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 89th percentile of its annual range. This suggests options traders are picking up calls at a much quicker-than-usual clip.

It's also worth noting Newmont stock's Schaeffer's Volatility Scorecard (SVS) ranks at an elevated 85 out of 100. In other words, the equity tends to outperform options traders' volatility expectations.