Market Overview

Spike In Miners ETF Volume Matched By Leveraged Peers

Spike In Miners ETF Volume Matched By Leveraged Peers

The VanEck Vectors Gold Miners ETF (NYSE: GDX), the largest gold miners exchange traded fund listed in the U.S. saw major volume spike Wednesday following a huge uptick in turnover on Tuesday.

Some of the leveraged gold miners ETFs also saw big jumps in turnover.

What Happened

On Wednesday, 62 million shares changed hands in GDX, well above the ETF's average daily volume of 49 million.

GDX “saw trading volume spike to its highest in two months Tuesday,” reports Bloomberg. “About 90 million shares worth over $2 billion exchanged hands, double the fund’s usual volume and more than any other U.S. ETF that day. GDX is the largest materials ETF and tracks corporations that are primarily involved in mining gold and silver.”

Why It's Important

GDX is up 9.72 percent this year and those good vibes are being felt by the Direxion Daily Gold Miners Index Bull 3X Shares (NYSE: NUGT). NUGT, one of the most heavily traded leveraged ETFs, attempts to deliver triple the daily returns of the NYSE Arca Gold Miners Index (GDMNTR), the same index GDX follows.

On Wednesday, 16.21 million shares changed hands in NUGT compared with average daily volume of 9.57 million shares.

As Bloomberg notes, some precious metals ETFs have been shedding assets this month and some of the increased volume in GDX could be a case of selling. GDX has seen year-to-date outflows of just over $551 million.

What's Next

While investors have been trimming exposure to GDX, data confirm some traders are piling into the leveraged NUGT. For the five days ended Tuesday, Feb. 19th, NUGT saw inflows of $40.30 million, by far the largest inflows of any leveraged Direxion ETF during that period, according to issuer data.

On Tuesday, Feb, 19th, NUGT added $9.84 million in new assets, a total surpassed by just two other Direxion ETFs on that day.

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