Gold Tumbles 5.6%: Are Mining Stocks the Next Big Trade?

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.”

Read More


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: