Gold Miners Try To Dig Out The Ditch
Throughout this week, the leading gold mining stocks have come under heavy selling pressure. The Market Vectors Gold Miners ETF (NYSEARCA:GDX) has declined from $56.00 a share on December 12, 2011 down as low as $51.57 a share yesterday. That is a major drop for the ETF in less than a week by anyone’s standards. This morning, the GDX is trading higher by $1.05 to $52.75 a share. The daily chart is short term oversold so a near term technical bounce should not be ruled out. The GDX also has a lot of short term daily chart support around the October lows. Traders can watch for intra-day support on the GDX around the $53.25, and $54.00 levels.
Some other leading gold mining stocks that are trading higher this morning include Goldcorp Inc (NYSE:GG), Newmont Mining Corp (NYSE:NEM), and Yamana Gold Inc (NYSE:AUY). When gold and the gold miners decline it is usually a good sign of deflation in the market place. The opposite is true when gold and the gold miners rally, it is a sign of inflation. Therefore, all moves in the gold mining stocks should be viewed as short term at this time.