In the essence of brevity and not belaboring previously made points, gold and gold miners exchange traded funds have been getting trounced in recent weeks. Over the past month, the SPDR Gold Shares (NYSEArca: GLD) and the Market Vectors Gold Miners ETF (NYSEArca: GDX) are down 7.3% and 26.2%, respectively.
Of course, junior and small-cap miners have not been immune to that dour trend. Thursday’s batch of the worst-performing ETFs on a percentage reads like a graveyard of gold ETFs, including the Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) and the Sprott Junior Gold Miners ETF (NYSEArca: SGDJ).
GDXJ has tumbled 26.4% over the past month while the rival SGDJ has bled almost 28%, but those ugly performances are not stopping traders from bottom-fishing with leveraged bull junior miners funds. In what can be viewed as a small sequel to what has been seen in recent days with the Direxion Daily Gold Miners Bull 3X Shares (NYSEArca: NUGT), new cash was put to work yesterday in the Direxion Daily Junior Gold Miners Index Bull 3x Shares (NYSEArca: JNUG). [Traders Crushed by Leveraged Miners ETFs]
On Wednesday, traders poured nearly $6.8 million JNUG, the triple-leveraged answer to the aforementioned GDXJ. They have not been rewarded for that leap of faith. JNUG is off nearly 11% at this writing, bring its one-month loss to 64%.
Add to that, the inflows to JNUG, however small they may be, are extension of another theme that has been seen with JNUG: Traders allocating new money to the wrong leveraged gold miners.
The almost $6.8 million added to JNUG was the third-best total among Direxion’s leveraged ETFs, according to issuer data.
Unfortunately, traders pulled over $32 million combined from the Direxion Daily Gold Miners Bear 3X Shares (NYSEArca: DUST) and the Direxion Daily Junior Gold Miners Index Bear 3X Shares (NYSEArca: JDST). Coming into Thursday, DUST and JDST were up 80% and 76.7%, respectively, just this month. With today’s gains, DUST has more than doubled in July while JDST is up more than 86%. [Trouble for Gold Miners ETFs is Coming]
Again unfortunately, 30-day data from Direxion indicate traders have been pulling from DUST but adding capital to JNUG and NUGT.
Direxion Daily Gold Miners Bear 3X Shares
