Saturday, November 29, 2014

"Gold Miner ETF Suffers Biggest One-Day Loss in Over a Year" (GDX; GDXJ)

From Barron's
Friday’s oil crash laid waste to energy shares, but the gold miners were similarly trampled: the Market Vectors Gold Miners (GDX) just quietly suffered its biggest one-day decline in nearly 1 1/2 years.
GDX, the biggest exchange-traded fund holding precious-metal miner stocks, dropped 8.7% on to close at $18.36 on Friday. Miner stocks, which tend to act like spring-loaded vehicles for trading gold or silver themselves, have been hugely volatile in recent weeks as gold has flirted with multiyear lows.

But Friday’s plunge in miners was extreme compared with the move in gold, and even with the recent turmoil for miner stocks; indeed, Friday was the biggest one-day percentage decline for GDX since April 15, 2013, a day when gold suffered its biggest ever one-day price drop, according to data from FactSet.

Miners slipped on Friday in tandem with prices for the yellow metal, which dropped 2.7% to $1,165 an ounce in recent trading. Bloomberg’s Joe Deaux and Laura Clarke note that falling oil and gasoline prices conspire to tamp down inflation expectations, reducing demand for gold, often singled out as a hedge against rising prices.

Investors are also looking ahead to vote in Switzerland Sunday; a “yes” vote for a measure would require the Swiss National Bank to ramp up its gold assets. But most expect to measure to fail, which would hit gold prices more and in turn pressure gold miners even more....MORE
At least one investor was caught on the wrong side of the action, again. Here he is the first time around: