ETFs tracking gold and silver miner stocks continued to plunge this week to new multiyear lows as precious metals were also under severe pressure.
Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ), Market Vectors Gold Miners (NYSEArca: GDX) and Global X Silver Miners ETF (NYSEArca: SIL) were all poised for weekly losses of more than 10% in afternoon trading Friday.
GDXJ, the small-cap gold miner ETF, has shed half its value over the past six months.
Gold prices fell below $1,400 an ounce this week with investors favoring riskier assets like stocks and dialing back inflation expectations. SPDR Gold Shares (NYSEArca: GLD) was on track for a weekly loss of nearly 6%. Meanwhile, PowerShares DB US Dollar Index Bullish Fund (NYSEArca: UUP) has been strong on speculation the Federal Reserve may ease back on its bond purchases. [Gold, TIPS ETFs See Outflows]
Absa Investments analyst Craig Pheiffer in a Business Day report said rising operating costs and the damaging consequences of strike activity on production have amplified the negative sentiment towards gold stocks. “Gold miners also fall into the resources category (that are suffering ) from lower prices because of weaker demand.”
In the major U.S. stock indices, the S&P 500 was set for a weekly advance of 1.7%, the Dow gained 1.3% and the Nasdaq Composite added 1.5%. [S&P 500 ETF Eyes Fresh Record on Consumer Sentiment]