An exchange traded fund tracking gold miners is back near the top of the range it has been stuck in for over a year, and some technical analysts think the ETF is poised to break out to a new record high.
“When these sort of consolidations take place, I like to give the benefit of the doubt to the direction of the underlying trend,” writes J.C. Parets at All Star Charts.
“In this case, the trend has been higher for a long time so we’re anticipating a breakout to the upside here,” he added, pointing to the decade-long upside trend in Market Vectors Gold Miners ETF (NYSEArca: GDX).
The miners ETF is up about 11% over the past month and has gained 2.5% year to date, according to investment researcher Morningstar. It follows stocks, unlike some other ETFs that track gold bullion prices.
Earlier this month, the fund was turned away at an attempt to break through its yearlong range and 52-week high. [Gold Miners ETF Turned Back at 52-Week High]
Small-cap miner stocks, meanwhile, are lagging in 2011. Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) is down about 6% so far this year.
Direxion Daily Gold Miners Bear 2x Shares (NYSEArca: DUST) is a leveraged inverse ETF that bets against the sector. It seeks daily investment results of 200% of the inverse, or opposite, of the price performance of the NYSE Arca Gold Miners Index. [Inverse Gold Miners ETF]
Market Vectors Gold Miners ETF
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.