The gold miners’ stocks have largely ground sideways in the last couple months, consolidating their big mid-summer gains. That drift is slowly bleeding away greedy sentiment, but this sector remains really overbought. Gold stocks’ dominant driver gold is even more overbought, and still facing a massive gold-futures-selling overhang. This makes October, gold stocks’ weakest month seasonally by far, particularly risky.
The gold stocks have enjoyed a big run since late May. Their leading benchmark and trading vehicle is the GDX VanEck Vectors Gold Miners ETF. Birthed way back in May 2006, its first-mover advantage has proven insurmountable. This week GDX’s $12.0b in net assets were a colossal 36.4x larger than its next-biggest 1x-long major-gold-miners-ETF competitor! GDX is the most-popular metric to track sector performance.