Market Vectors Gold Miners (NYSEArca: GDX) plunged over 5% on Wednesday to the lowest levels since 2009 as precious metals ETFs tracking gold and silver were also under heavy pressure.
SPDR Gold Shares (NYSEArca: GLD) fell 1.4% while iShares Silver Trust (NYSEArca: SLV) dropped 1.3% in afternoon trade.
Gold futures touched $1,550 an ounce on Wednesday, the lowest reading in nine months.
Precious metals, oil and other commodities pulled back sharply along with U.S. stocks as the Dow shed 100 points. [Silver ETF Lowest Since August 2012 Amid Commodity Slump]
However, gold miner ETFs continue to fall harder than bullion prices recently as investors dial back on the safe-haven and inflation trades.
Direxion Daily Gold Miners Bear 3x Shares (NYSEArca: DUST), a leveraged ETFs that bets against the sector, rallied 15% on Wednesday.
GDX has fallen 36% the past six months.
GDX and other funds in the category “generally trade as a leveraged play on the underlying commodities, so when gold prices are slumping, these mining ETFs are truly hurting,” Zacks reports.
“This has particularly been the case as of late, as the double whammy of weak gold prices and a strong dollar has hurt operations of these firms,” Zacks notes. “This is even more true for gold miners that have heavy international operations, as repatriation from foreign currencies back to U.S. dollars adds to their woes even more.”
Market Vectors Gold Miners
Full disclosure: Tom Lydon’s clients own GLD and SLV.