Yesterday’s session was not like the previous ones – in the previous days, the precious metals sector moved lower together and mining stocks were leading the way. Yesterday, gold and silver declined, but miners were barely affected. Does this strength indicate a likely turnaround?
In short, that’s not likely. Miners had a very good reason to rally. The general stock market soared yesterday and mining stocks, being stocks themselves were positively affected by this development. This is something that happens quite often, but let’s keep in mind that this effect is usually temporary. Ultimately, the gold stocks’ profits depend on the price of gold and thus this is the key driver of the miners’ prices. Let’s see exactly how much the mentioned markets moved (chart courtesy of http://stockcharts.com).
The GDX ETF was down by 13 cents which is next to nothing. The volume was rather average and the entire session was yet another day of a post-decline pause.