Gold-Stock Red October

By Adam Hamilton – Re-Blogged From Gold Eagle

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.

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