Gold stocks have suffered a terrible month, plunging in a serious selloff. The resulting carnage has left investors and speculators shaken, wondering if this red-hot sector’s blistering new bull this year has already run out of steam. These fears are misplaced, as massive corrections are common in major gold-stock bulls. They create bulls’ best buying opportunities in sentimental, technical, and fundamental terms.
It’s easy to understand why gold-stock sentiment is so bearish today, as this sector has been trashed since early August. In less than a month the gold miners went from 2016’s overwhelmingly-dominant top-performing sector to bear-market-grade losses! Falling from heroes to zeroes in such a short span of time is enough to test the resolve of even the most-hardened contrarians. It’s a tough turn of events to weather.
The leading gold-stock benchmark is the NYSE Arca Gold BUGS Index, better known by its symbol HUI. Its performance is nearly identical to that of the flagship GDX VanEck Vectors Gold Miners ETF, which is the most-popular gold-stock investment vehicle by far. Comprised of many of the same elite gold miners, both benchmarks suffered enormous losses over the past month. This year’s HUI chart tells the sordid tale.
This post was published at ZEAL LLC on September 9, 2016.
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