Thursday, 31 December 2015

GDX - a fourth bad year for mining stocks

With precious metals seeing a fourth year of broad weakness, the related mining stocks were naturally pulled lower. The ETF of GDX saw a net yearly decline of -$4.50 (-24.7%) @ $13.72. Outlook remains bearish as the metals show no sign of a floor, and with the USD set to sustainably trade above the DXY 100 threshold.

GDX, monthly

GDX, daily


Suffice to add... the spike high of $64.51 in Sept'2011 is now an increasingly distant and fading memory.

Even though GDX is not leveraged, it has declined by a rather horrific -78.7% in just over four years.

Little hope in the near term

The precious metals outlook remains broadly bearish, and if correct, GDX will break new lows in 2016. The 11/10s look a rather easy target.

The only issue is whether $900/875 Gold might equate to GDX in the 8/7s.. or even lower.

In any case... I see ZERO reason to be long the precious metals - or the related mining stocks, at least for another 3-6 months.

I do look forward to calling such a floor, and I strongly believe the miners will offer one of the best trades out there into the 2020s.

yours.... still patiently waiting... after four years.