Gold miner ETFs have been the proverbial falling knife that has lopped off the fingers off many traders and investors who have tried to call a bottom in this beleaguered sector in recent years.
After several head fakes, are we finally seeing the fabled recovery in gold miner stocks?
Market Vectors Junior Gold Miners (NYSEArca: GDXJ) and Market Vectors Gold Miners (NYSEArca: GDX) were up about 7% on Friday.
A 300% leveraged ETF, Direxion Daily Gold Miners Bull 3x Shares (NYSEArca: NUGT), soared 20%.
In bullion-backed ETFs, SPDR Gold Shares (NYSEArca: GLD) rallied 4% as gold futures climbed back above $1,600 an ounce following the awful May nonfarm payrolls report. [Gold ETFs Rally]
Gold miner ETFs, once left for dead, are starting to show some positive technical signs.
Miner ETFs have been outperforming gold prices since mid-May. Of course, the long-established trend has miners badly lagging bullion. [Junior Gold Miner ETF Hits All-Time Low as Investors Favor Bullion]
According to Chris Kimble at Kimble Charting Solutions, the price ratio of gold versus gold stocks recently hit the lowest level in 30 years and was a fraction below the 2008 lows.
Market Vectors Gold Miners (GDX) on Friday rose above its 50-day simple moving average for the first time since early March.
Earlier this week, Tom Lydon discussed gold miner ETFs on Chuck Jaffe’s MoneyLife Show. He said valuations and profit margins are very attractive in this beaten-down sector. [ETF of the Week: Gold Miners]
Market Vectors Gold Miners
Full disclosure: Tom Lydon’s clients own GLD.