Why did gold miners crash so hard in the past 2 days (14-15 March)?

[helpme]

I suffered some burns from the gold miners in the past 2 days. Just last week, they were still doing fine. The crash in the past 2 days was really hard. Look at NST.AX. It crashed double-digit on Monday and >5% so far today.

I cannot find specific news on gold miners that would cause such a crash. Can the wiser forummers here enlighten me? I would like to understand why some of my blood has been spilled on the streets. Thank you very much.

 

[notting]

I suffered some burns from the gold miners in the past 2 days. Just last week, they were still doing fine. The crash in the past 2 days was really hard. Look at NST.AX. It crashed double-digit on Monday and >5% so far today.

I cannot find specific news on gold miners that would cause such a crash. Can the wiser forummers here enlighten me? I would like to understand why some of my blood has been spilled on the streets. Thank you very much.

The argument is that risk is on, and the yeild chase is back on both of which are bad for gold and it's price has turned down since. Started with Draghi stimulus, which many thought would be good for gold. But he capped negative yields on interest rates which against worked against gold which is not a yielder.
The only thing driving gold these days is currency wars and macro fears.
See how far this stock rally goes, then maybe look at gold again then.

 

[skc]

I suffered some burns from the gold miners in the past 2 days. Just last week, they were still doing fine. The crash in the past 2 days was really hard. Look at NST.AX. It crashed double-digit on Monday and >5% so far today.

I cannot find specific news on gold miners that would cause such a crash. Can the wiser forummers here enlighten me? I would like to understand why some of my blood has been spilled on the streets. Thank you very much.

The spot gold has weakened in the past few days, plus yesterday there was a quarterly rebalance by a sizable gold ETF (GDX) and that threw quite a few stocks around (explains why NST was down a lot yesterday while SBM and IGO were up).

Having said all that...Gold stocks are volatile and the movements in the past 2 days probably aren't that out of the ordinary statistically.

 

[notting]

The spot gold has weakened in the past few days, plus yesterday there was a quarterly rebalance by a sizable gold ETF (GDX) and that threw quite a few stocks around (explains why NST was down a lot yesterday while SBM and IGO were up).

Having said all that...Gold stocks are volatile and the movements in the past 2 days probably aren't that out of the ordinary statistically.

IGO has been trading according to sentiment on its SIR purchase as apposed to gold.
It didn't reverse till copper, Nickel and IO bounced, whilst other goldies had been flying with gold.
Just thought I'd note that.

 

[skc]

IGO has been trading according to sentiment on its SIR purchase as apposed to gold.
It didn't reverse till copper, Nickel and IO bounced, whilst other goldies had been flying with gold.
Just thought I'd note that.

IGO is more nickel than gold... I have in my mind 70% nickel, 30% gold but don't quote me on that.

Nonetheless, IGO was indeed an addition by the GDX ETF which largely explain the spike yesterday.

 

[notting]

IGO is more nickel than gold... I have in my mind 70% nickel, 30% gold but don't quote me on that.

Nonetheless, IGO was indeed an addition by the GDX ETF which largely explain the spike yesterday.

Groovy.
Should make for some more irrational behavior!
eg No more neg from the Japs and goldies stabilise after falling all morning. :silly:

Priced in. Now looking for Fed not too do what everyone thought it would 2 months ago, may see a bit of strength till then.

 

[Craton]

To skc and notting, re. your replies and commentary to helpme's OP.

Thank you for the depth of your "finger on the pulse" replies. A great insight into how market forces of supply and demand, in our commoditized world, impacts on share prices and the broader markets. Priceless.

Without going looking, do you when the Fed next meets?

 

[notting]

The FOMC is scheduled to begin its two-day meeting Tuesday and release its statement and economic projections followed by a news conference on Wednesday.
The report will shed light on inflation, although analysts put more weight on the consumer price index- due Wednesday for that critical indicator which will be the front runner for what the Fed does. Everyone I have seen bar one guy is saying fed will not raise at next meet so consensus is that there will not be a raise till toward middle of the year.
Hence now that Europe and Japan are out of the way and China is saving face by trying to make it look like their currency is not going down, there is not allot of upside for gold given it did not react positively to Draghis' efforts.
If inflation is unexpectedly up in the states, then it will be limbs and livers not just blood!

 

[helpme]

Thanks for all the replies and insights.

I find it strange that GDX would drop NST.AX from its portfolio given that NST.AX was trading at 52-week high last week. Usually, a stock would be dropped from an ETF after it has fallen some distance from the top and not while it is trading at 52-week high.

 

[skyQuake]

Thanks for all the replies and insights.

I find it strange that GDX would drop NST.AX from its portfolio given that NST.AX was trading at 52-week high last week. Usually, a stock would be dropped from an ETF after it has fallen some distance from the top and not while it is trading at 52-week high.

It was in fact the GDXJ that dropped NST et al. Since the GDXJ is mandated to look at the smaller end of the market, NST's ongoing strength made it "too big" to hold.
Somewhat ironically, RRL's underperformance relative to the other goldies saved it from deletion!

 

[helpme]

It was in fact the GDXJ that dropped NST et al. Since the GDXJ is mandated to look at the smaller end of the market, NST's ongoing strength made it "too big" to hold.
Somewhat ironically, RRL's underperformance relative to the other goldies saved it from deletion!

How ironic. I just looked at RRL. It dropped quite badly too in the past 2 days, but not as bad as NST. RRL dropped 6.64% yesterday and dropped another 6.28% today even though it's still inside GDXJ.

 

[skyQuake]

How ironic. I just looked at RRL. It dropped quite badly too in the past 2 days, but not as bad as NST. RRL dropped 6.64% yesterday and dropped another 6.28% today even though it's still inside GDXJ.

Newmont sold their stake in RRL - and that chunk went underwater very quickly. So all those liquidity providers are now regretting life choices

 

[qldfrog]

Without going looking, do you when the Fed next meets?

without looking I believe meeting from today...

 

[Craton]

The FOMC is scheduled to begin its two-day meeting Tuesday and release its statement and economic projections followed by a news conference on Wednesday.
The report will shed light on inflation, although analysts put more weight on the consumer price index- due Wednesday for that critical indicator which will be the front runner for what the Fed does. Everyone I have seen bar one guy is saying fed will not raise at next meet so consensus is that there will not be a raise till toward middle of the year.
Hence now that Europe and Japan are out of the way and China is saving face by trying to make it look like their currency is not going down, there is not allot of upside for gold given it did not react positively to Draghis' efforts.
If inflation is unexpectedly up in the states, then it will be limbs and livers not just blood!

Thanks. Certainly hope we don't all end up with splints and on the organ waiting list although shorts, dry powder and bottom feeding has its rewards.

without looking I believe meeting from today...

 

[helpme]

This is painful. Immediately after I sold off gold miners, they rallied hard perhaps thanks to the weak dollar. It is my first time buying gold miners and I am shocked at the volatility. Highly unusual compared to normal stocks.