Sterne Agee analysts in a note this week said gold miners are underpriced after the carnage this year in the sector. [Central Bank Stimulus Would Rally Gold ETFs]
Gold miner ETFs, once left for dead, are starting to show some positive technical signs. [Have Gold Miner ETFs Finally Reached the Turning Point?]
“These options flows are not surprising given that GDX recently bucked the overall market trend beginning late last week and the ETF is now starting to break out after a prolonged period of underperformance to spot gold prices,” said Paul Weisbruch at Street One Financial.
“Trading volumes in the underlying ETF in GDX have been off the chart in recent sessions as well compared to average daily turnover. Now that the equity markets in general are starting to trade above specific technical levels once more such as the S&P 500 above its 200-day moving average today, it is not surprising to see money chasing what is considered a ‘higher beta’ sector, and moreover, one that has significantly trailed the broad equity market … as well as spot gold prices.”
Market Vectors Gold Miners ETF
