“Speculator net longs and commercial net shorts – are once again converging. They’ve yet to meet in the middle, but another couple of months on the current trajectory and they will. So the stage being is set for another positive stretch in gold/silver prices, and by implication precious metals mining stocks,” reports ETF Daily News.
This is a situation that is worth watching for investors considering GDX and GDXJ to start 2017.
“For a sense of what that means for the miners, the price chart of GDX, a major gold miner ETF, is instructive. After getting absolutely crushed during the last four months of the previously-mentioned multi-year bear market, it took off in January of 2016, rising by about 150% in six months. Since then it has given back about half its gains,” according to ETF Daily News.
Aggressive traders willing to bet on more declines for gold miners can consider the Direxion Daily Gold Miners Bear 3X Shares (NYSEArca: DUST) and the Direxion Daily Junior Gold Miners Index Bear 3X Shares (NYSEArca: JDST).
For more information on the gold market, visit our gold category.