After Falling, Can Gold Miners ETFs get Back Up?

How to Prepare for a Possible Gold ETF Pullback

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.

SEE MORE: Gold Miners ETFs Confirm Strength Against Broad Market

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).