It was fun while it lasted, but it looks as though the gold trade is finally unwinding. The precious metal booked a record high close just two days ago, settling at $1,891.90 an ounce on Monday. Today it took a fast and furious 5.6% dive to close at $1,757.30/oz; its biggest single-day drop since March 2008.
What’s been curious about the recent rush to gold is that gold mining stocks weren’t taken along for the ride higher. “There’s long been a knock on the miners,” says Ryan Detrick of Schaeffer’s Investment Research. “Gold is making multi-year highs but the miners aren’t.”
A simple comparison chart shows spot Gold leading the Market Vectors Gold Miners ETF (GDX) by about 30% on a year-to-date and 1-year basis. But as relative strength in miners improves and the world’s favorite safe haven plunges, Detrick says it might be time for “a catch-up buy.”