Friday is proving to be just another day at the office for gold miners exchange traded funds and that is not a good thing.
On a day when U.S. stocks are again soaring, these equity-based ETFs are getting drubbed because, well, gold is getting drubbed. The SPDR Gold Shares (NYSEArca: GLD) is down almost 3% and hit a new 52-week low earlier today.
Speaking of new lows, in what has become a prominent pattern, Friday’s ETF all-time low club is chock full of miners funds. To this point Friday, 35 ETFs have made new all-time lows, of which nearly 10 are gold or silver miners funds. Yes, this scenario is starting to sound like a broken record. As we reported late in Thursday’s session, of the 17 ETFs that were at all-time lows at the writing of that piece, 13 were gold or silver miners funds. [What’s Happening With Miners ETFs]
Today’s list does not include the Market Vectors Gold Miners ETF (NYSEArca: GDX), the largest miners ETF, but that fund continues to hover around its lowest levels since October 2008.
Friday’s new all-time low ETF club is populated by some familiar names including the Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ), which has managed to lost almost 19% this week. And yes, the Direxion Daily Gold Miners Bull 3X Shares (NYSEArca: NUGT) and the Direxion Daily Junior Gold Miners Index Bull 3x Shares (NYSEArca: JNUG) are all-time low repeat offenders as well.
Though the pair is trading above their intraday lows, NUGT is down 13.2% and JNUG is off 18.6%. That brings their weekly losses to nearly 39% and over 50%, respectively, and there is still time to go in Friday’s session. [Getting it Wrong With Leveraged Miners ETFs]
Making matters worse, another scenario is repeating itself: Traders continue to be burned by trying to catch bottoms in NUGT and JNUG. On Thursday, only the Direxion Daily S&P 500 Bull 3X Shares (NYSEArca: SPXL) added more new assets than the $81 million that flowed into NUGT among Direxion’s leveraged ETFs.
In further proof that traders are dangerously insistent on buying long gold miners, only the Direxion Daily Small Cap Bull 3X Shares (NYSEArca: TNA) lost more money yesterday than the Direxion Daily Gold Miners Bear 3X Shares (NYSEArca: DUST) and the Direxion Daily Junior Gold Miners Index Bear 3X Shares (NYSEArca: JDST).
DUST is up 50% this week while JDST is flirting with a weekly gain of 69%. Yet, over the past 30 days, there has been creation activity in JNUG and NUGT while there traders have redeemed shares of DUST and JDST, according to Direxion data.
Direxion Daily Junior Gold Miners Index Bull 3x Shares
Tom Lydon’s clients own shares of GLD.