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Gold Miners ETFs Are Getting Smoked

November 18, 2015 3:50 pm
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Wednesday's list of exchange traded products hitting all-time lows is a graveyard of precious metals funds. To this point in Wednesday's session, 16 ETFs and exchange traded notes (ETNs) have touched all-time lows with half of those being precious metals products. That group of eight does not include another six diversified commodities ETFs, several of which have ample precious metals exposure.


Following last week's terror attacks in Paris, oil has been getting seemingly more attention than usual, but the persistently strong U.S. dollar has been a drag on most commodities, including gold and other precious metals


With the SPDR Gold Shares (NYSE: GLD), the world's largest gold-backed ETF, down 5.7 percent over the past month and trading within pennies of its 52-week low, it is not surprising that gold miners ETFs are getting thrashed.


That is especially true of the leveraged variety. The Direxion Daily Gold Miners Bull 3X Shares (NYSE: NUGT) and its small-cap counterpart, the Direxion Daily Junior Gold Miners Index Bull 3x Shares (NYSE: JNUG) are two members of today's ETF all-time low club. Keep this in mind: NUGT and JNUG were recently reverse split and JNUG is on its second reverse split in a less than a year, but the pair have managed to keep cascading to all-time lows. 


Entering Wednesday, NUGT and JNUG were down an average of 30.5 percent on a month-to-date basis, making the funds the worst and second-worst performers among Direxion's stable of bullish leveraged ETFs. As is to be expected, leveraged gold miners ETFs are volatile. Really volatile. The only Direxion leveraged bullish ETF that has been more volatile than NUGT and JNUG over the past month is the Direxion Daily Natural Gas Related Bull 3X Shares (NYSE: GASL), according to issuer data


Yet NUGT and JNUG remain falling knives some traders insist on catching. For example, on Tuesday, traders poured $39.2 million in new capital in NUGT, a total exceed by just two other Direxion ETFs. Conversely, traders yanked $26.2 million from the Direxion Daily Gold Miners Bear 3X Shares (NYSE: DUST), more than was pulled from any other leveraged Direxion ETF yesterday, according to issuer data.


Oh yeah, DUST came into Wednesday with a November gain of 42.5 percent, making it the best-performing Direxion bearish leveraged ETF this month.

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