Gold miners exchange traded funds, such as the VanEck Vectors Gold Miners ETF (NYSEArca: GDX) and the VanEck Vectors Gold Miners ETF (NYSEArca: GDXJ), previously among this year’s best-performing ETFs, have recently been punished.
The August sell-off in gold miners may have contributed to the $1.1 billion in inflows for the VanEck Vectors Gold Miners ETF (NYSEArca: GDX) as traders saw a buying opportunity after a pullback. However, the play may have been premature as gold assets, notably miners, plunged over the past few days.
Precious metals have been under pressure over the past week as hints of an improving economy and a number of hawkish statements from Fed officials raised the prospect of a tightening monetary policy.
According to the Fed-funds futures market, options traders are betting on a 63.9% chance of a rate hike in December, compared to just below 60% a day ago. Investors should also assess the technical conditions on the widely followed Gold & Silver Mining Index (XAU).