Friday, September 02, 2016 1:30:30 AM
Gold Miner ETFs Flip To Bear Territory
MMgys
Gold Miner ETFs Flip To Bear Territory
By Chris Dieterich
If you own gold shares, now is the time to reach for your bear canister. Fresh off the heels of a furious seven-month run-up in 2016, miner stocks are smack in the huckleberry patch that marks bear market territory.
The VanEck Vectors Gold Miners ETF (GDX), which tracks shares of Barrick Gold (ABX) and Newmont Mining (NEM), declined 1.1% on Wednesday. It’s the 10th decline over the past 13 trading days and puts the ETF’s price down 19.9% since its Aug. 12 high. Remember that declines in excess of 20% are considered “bear markets.” Another popular ETF that owns shares of smaller miners, the VanEck Vectors Junior Gold Miners ETF (GDXJ), is already in the bear zone, down 21% since peaking on Aug. 11. Barron’s Steven Sears noted prudently last week that “It’s Time to Hedge Bets on Gold Positions.”
Shares of gold-mining companies tend to be volatile and this year is no exception. GDX more than doubled in price from January through July. Investors pumping $16 billion money into exchange-traded funds such as the SPDR Gold Shares (GLD) this year are widely cited as contributing drivers for gold’s rally. That could be running out of steam. GLD has seen $76 million in withdrawals over the past week.
RBC Capital Markets’ commodity strategist Christopher Louney made the call that gold has seen its peak this year (absent some out-of-the-blue risk-off event). He goes on:
“ETP demand has been a key driver given its commensurate rise with prices, but given that the dollar exposure to gold has increased massively beyond the increase in tonnage terms, 74% versus 39% YTD, we think that the room for further allocations is dwindling and that it will be hard to repeat H1’s gains.
Falling over one’s self to chase a price higher is rarely a winning move, and we continue to recommend selling into rallies in this market. Upcoming Fed announcements will be key to whether or not our investment thesis stands, but given the investor-only nature of this year’s gold rally, we still think it is tenuous at best, or primed for a correction at worst.”
Big Flow Reversal Last Month As Gold, Low-Vol See Withdrawals
By Chris Dieterich
A shift in investor preference toward riskier stocks left 2016's biggest fund magnets for new investor money with stiff outflows in August.
A preference for get-to-the-bunker assets gold and low-volatility stocks has dominated flow trends in the ETF market all year long. The SPDR Gold Shares exchange-traded fund (GLD) has pulled in nearly $12 billion in new money and the iShares Edge MSCI Min Vol USA ETF (USMV) has grabbed $6.2 billion.
Over the past month, however, the trend reversed in a big way. The USMV shed $455 million while the GLD saw $353 million, according to XTF.com. Over the same period, the biggest ETF recipients of new money were all about emerging markets. The iShares MSCI Emerging Markets ETF (EEM) grabbed a whopping $2.1 billion over the past month. The Vanguard FTSE Emerging Markets ETF (VWO) also absorbed big flows to the tune of $1.3 billion.
http://blogs.barrons.com/focusonfunds/2016/08/31/gold-miner-etfs-flip-to-bear-territory/
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MMgys
The Fall of the American Republic: Six Caesars
"Rome has grown so much since its humble beginnings that it is now overwhelmed by its own greatness...The state is suffering from two opposite vices, greed and excesses; two plagues which, in the past, have been the ruin of every great empire."
Livy
A Nation of Servants
The PMI number came in much lower than expected this morning at 49.4, an outright contraction.
This was dismissed by some as indicative of manufacturing, which is no longer very important to GDP as compared to the 'service sector.'
All eyes will be on the Non-Farm Payrolls report, probably to an excess, because the thinking is that a stronger number will give the hawks cover to arm twist a 25 bp rate increase at the FOMC in September.
A much lower than expected number will chill that expectation, and will probably cheer on financial asset prices unless it is disastrous.
The expected number is 180,000 and the 'whisper' is 200,000.
After the initial reaction, wiser heads will be looking at the prior month's revision from 255,000 if any. And probably more importantly, they will look at the growth in average hourly earnings.
The financiers and the Democratic establishment would like a number north of 200k. This would give the former a stronger dollar to eat you with my foreign dears, and the latter a boost for their presidential candidate who hopes to ride in on waves of Obama brand economicolatry.
So let's see what happens.
Have a pleasant evening.
http://jessescrossroadscafe.blogspot.com/
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Have A Wonderful Day !
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
MMgys
Gold Miner ETFs Flip To Bear Territory
By Chris Dieterich
If you own gold shares, now is the time to reach for your bear canister. Fresh off the heels of a furious seven-month run-up in 2016, miner stocks are smack in the huckleberry patch that marks bear market territory.
The VanEck Vectors Gold Miners ETF (GDX), which tracks shares of Barrick Gold (ABX) and Newmont Mining (NEM), declined 1.1% on Wednesday. It’s the 10th decline over the past 13 trading days and puts the ETF’s price down 19.9% since its Aug. 12 high. Remember that declines in excess of 20% are considered “bear markets.” Another popular ETF that owns shares of smaller miners, the VanEck Vectors Junior Gold Miners ETF (GDXJ), is already in the bear zone, down 21% since peaking on Aug. 11. Barron’s Steven Sears noted prudently last week that “It’s Time to Hedge Bets on Gold Positions.”
Shares of gold-mining companies tend to be volatile and this year is no exception. GDX more than doubled in price from January through July. Investors pumping $16 billion money into exchange-traded funds such as the SPDR Gold Shares (GLD) this year are widely cited as contributing drivers for gold’s rally. That could be running out of steam. GLD has seen $76 million in withdrawals over the past week.
RBC Capital Markets’ commodity strategist Christopher Louney made the call that gold has seen its peak this year (absent some out-of-the-blue risk-off event). He goes on:
“ETP demand has been a key driver given its commensurate rise with prices, but given that the dollar exposure to gold has increased massively beyond the increase in tonnage terms, 74% versus 39% YTD, we think that the room for further allocations is dwindling and that it will be hard to repeat H1’s gains.
Falling over one’s self to chase a price higher is rarely a winning move, and we continue to recommend selling into rallies in this market. Upcoming Fed announcements will be key to whether or not our investment thesis stands, but given the investor-only nature of this year’s gold rally, we still think it is tenuous at best, or primed for a correction at worst.”
Big Flow Reversal Last Month As Gold, Low-Vol See Withdrawals
By Chris Dieterich
A shift in investor preference toward riskier stocks left 2016's biggest fund magnets for new investor money with stiff outflows in August.
A preference for get-to-the-bunker assets gold and low-volatility stocks has dominated flow trends in the ETF market all year long. The SPDR Gold Shares exchange-traded fund (GLD) has pulled in nearly $12 billion in new money and the iShares Edge MSCI Min Vol USA ETF (USMV) has grabbed $6.2 billion.
Over the past month, however, the trend reversed in a big way. The USMV shed $455 million while the GLD saw $353 million, according to XTF.com. Over the same period, the biggest ETF recipients of new money were all about emerging markets. The iShares MSCI Emerging Markets ETF (EEM) grabbed a whopping $2.1 billion over the past month. The Vanguard FTSE Emerging Markets ETF (VWO) also absorbed big flows to the tune of $1.3 billion.
http://blogs.barrons.com/focusonfunds/2016/08/31/gold-miner-etfs-flip-to-bear-territory/
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
MMgys
The Fall of the American Republic: Six Caesars
"Rome has grown so much since its humble beginnings that it is now overwhelmed by its own greatness...The state is suffering from two opposite vices, greed and excesses; two plagues which, in the past, have been the ruin of every great empire."
Livy
A Nation of Servants
The PMI number came in much lower than expected this morning at 49.4, an outright contraction.
This was dismissed by some as indicative of manufacturing, which is no longer very important to GDP as compared to the 'service sector.'
All eyes will be on the Non-Farm Payrolls report, probably to an excess, because the thinking is that a stronger number will give the hawks cover to arm twist a 25 bp rate increase at the FOMC in September.
A much lower than expected number will chill that expectation, and will probably cheer on financial asset prices unless it is disastrous.
The expected number is 180,000 and the 'whisper' is 200,000.
After the initial reaction, wiser heads will be looking at the prior month's revision from 255,000 if any. And probably more importantly, they will look at the growth in average hourly earnings.
The financiers and the Democratic establishment would like a number north of 200k. This would give the former a stronger dollar to eat you with my foreign dears, and the latter a boost for their presidential candidate who hopes to ride in on waves of Obama brand economicolatry.
So let's see what happens.
Have a pleasant evening.
http://jessescrossroadscafe.blogspot.com/
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Have A Wonderful Day !
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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