Upbeat U.S. economic data and a less anxious market are tarnishing the safe-haven gold trade, with precious metals miners and sector-related exchange traded funds among the worst performers Friday.
The SPDR Gold Shares (NYSEArca: GLD) dipped 1.0% Friday while the Market Vectors Gold Miners ETF (NYSEArca: GDX) fell 3.7% and Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) declined 4.5%.
On the other hand, inverse or bearish gold-related ETFs were capitalizing off sudden turn. The ProShares UltraShort Gold (NYSEArca: GLL), which provides a two times inverse or -200% daily performance of gold bullion, was up 2.0% Friday. Alternatively, ETN options include the DB Gold Double Short ETN (NYSEArca: DZZ), which tries to generate the twice inverse or -200% return of the daily performance of gold, rose 2.1%; DB Gold Short ETN (NYSEArca: DGZ), which tries to reflect the inverse of gold price movements, added 1.2; and VelocityShares 3x Inverse Gold ETN (NYSEArca: DGLD), which tries to reflect the performance of three times the inverse or -300% daily performance, was 2.1% higher.
Meanwhile, short gold miner ETFs also enjoyed a bounce. On Friday, the Direxion Daily Gold Miners Bear 3X Shares (NYSEArca: DUST) and the Direxion Daily Junior Gold Miners Index Bear 3X Shares (NYSEArca: JDST), which take the -300% performance of gold miners and small-cap miners, are up 11.7% and 13.1%, respectively. The double-leveraged rivals to DUST and JDST, include the ProShares UltraShort Gold Miners (NYSEArca: GDXS) and the ProShares UltraShort Junior Miners (NYSEArca: GDJS).
While gold-related assets are still on pace for their best weekly gain in a year, gold futures and precious metals miners slipped Friday after the better-than-expected U.S. employment report strengthened investor confidence and diminished demand for safe-haven investments.
The Labor Department revealed the U.S. added 292,000 jobs in December, compared to average forecasts for a 210,000 gain, and also added 50,000 to prior estimates for October and November payrolls, the Wall Street Journal reports.
The improved economic numbers also strengthened the U.S. dollar, which also pressured commodity prices, including gold.
Moreover, after Chinese policy makers suspended the circuit-breaker system, China’s market slightly rebounded.
“Calmer markets in China and stabilization in the yuan have resulted in gold longs taking profit,” Georgette Boele, an analyst at ABN Amro Bank NV, told Bloomberg.
Market Vectors Gold Miners ETF
Max Chen contributed to this article.