Gold Sinks, Sends Miner ETFs into the Ground

Jacob Harper |

Gold had another down day on April 3, shedding half a percent to bring losses over the past 30 days to nearly 5 percent. Positive economic data out of the US combined with faltering physical demand in Asia to completely erase all of the gains the yellow metal made in mid-March.

The precious commodity tends to move inversely to the strength of the American economy, and gold’s price action over the last four weeks has been no exception. Economic data has suggested that manufacturing is increasing while jobless claims have decreased, sparking more optimism that the United States’ bull run is not due to wane quite yet.

At the same time, dealers in China were offering discounts on spot gold as a result of weaker demand. According to the Economic Times, 99.99 percent purity bars were going for a discount of $1 an ounce with discounts extending to as much as $8 an ounce earlier in the month.

As a result of gold’s retreat, ETFs tracking gold mining companies have suffered as of late. The triple-leveraged Direxion Daily Junior Gold Miners Bull 3X Shares (JNUG) was the hardest hit ETF on the entire market, losing 8.81 percent by midday on April 3, to hit $20.50 a share. JNUG is down 32.42 percent on the month. On the unleveraged front, the popular retail investor choice Market Vectors Junior Gold Miners ETF (GDXJ) shed 3.15 percent to hit $79.68 a share, and is down a worrying 35.63 percent since the beginning of the year.  

As of 2:30 PM EST gold was trading at $1,285.70 an ounce, a 0.33 percent drop on the day. Gold is down 4.78 percent in the last 30 days, and 18.43 percent from its price a year prior. Gold has yet to recover from a disastrous 2013 that saw the end of the precious metal’s 11-year bull run.

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Companies

Symbol Name Price Change % Volume
CMPNF Champion Re Invst Tr 0.54 0.00 0.00 0

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