The Crowded Gold Trade Gets Thinned Out

The Market Vectors Gold Miners ETF GDX is showing some resilience on Thursday, bouncing back 1.8 percent after a disastrous four days of trading. However, a look at the ETF’s chart reveals that the technical damage may already have been done for one of the strongest-performing ETFs in the market this year.

Wednesday’s big 7 percent drop in the GDX market the ETF’s fourth consecutive decline and its seventh daily decline in the last eight sessions. From a technical standpoint, the GDX closed significantly below its 50-day simple moving average (SMA) for the first time since January.

Despite the rebound on Thursday, the GDX remains below its 50-day SMA. In addition, GDX dipped below $27, taking out the $27.44 support level that held in July after making a series of higher lows throughout the first half of the year.

Related Link: OPEC: Who Are Its Members, What Does It Do And Why Does It Have The Power To Move The Market?

It’s understandable that the GDX may be pulling back or at least taking a breather to consolidate after its spectacular first half of the year. Even after the recent pull-back, the GDX remains up an incredible 100.7 percent in 2016.

The GDX isn’t the only gold play that has caught fire this year. The SPDR Gold Trust (ETF) GLD is up 24.3 percent this year. Levered gold ETFs Direxion Shares Exchange Traded Fund Trust NUGT and Direxion Shares Exchange Traded Fund Trust JNUG are up 367.9 percent and 585.7 percent, respectively, this year.

On the other hand, levered gold short ETF Direxion Shares Exchange Traded Fund Trust DUST has plummeted 95.9 percent in 2016.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsSpecialty ETFsTechnicalsCommoditiesMarketsMoversTrading IdeasETFsGoldmetalsprecious metals
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!