“The precious metals sector is currently extremely oversold and a relief rally is underway. It should last at least a few more weeks and maybe a few months. However, the primary trend is down and there are downside targets that are even lower,” according to ETF Daily News.
The short interest in the gold miner space has reached its highest level in five years. The Federal Reserve is widely expected to maintain a hawkish perspective. However, the Fed and the global economy may now get knocked onto a softer tightening path, which could create an attractive risk/reward into year-end.
Traders willing to wager on more declines for gold miners can consider the inverse leveraged Direxion Daily Gold Miners Index 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.