The entire
gold-mining sector was crushed last month, suffering a full-blown
panic. This was triggered by an extreme shorting attack on gold by
American futures speculators. As fear-blinded traders rushed for
the gold-stock exits, they claimed their selling was rational
because gold miners’ very existence was threatened by such low gold
prices. But that’s a total fallacy, this sector has no problem
weathering sub-$1200 gold.
The recent pain in
gold stocks has been excruciating. This sector’s benchmark of
choice these days is Van Eck Global’s Market Vectors Gold Miners
ETF, better known by its symbol GDX. It
closely mirrors
gold stocks’ long-time leading sector index, the NYSE Arca Gold BUGS
Index that trades as HUI. The carnage in these two gold-stock
metrics has been incredible, shattering the resolve of most
contrarian traders. (more)
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