Two Theories On Why Gold And Gold Stocks Are Collapsing

The gold miners and gold itself endured a rough week last week.

There are plenty of explanations of what contributed to the fall. There was

  1. the reversal in long-bonds (see bottom of this article)
  2. the flight to sell what is liquid
  3. just the overall panic that pervaded all asset classes.

But I think that something else contributed to the magnitude of what happened with the miners last week.
First, let’s look at the behavior.

First, there was a crazy drop at the end of day Friday for both the VanEck Vectors Junior Gold Miners ETF (GDXJ – NYSE) and the VanEck Vectors Gold Miners ETF (GDX – NYSE).

Source: Yahoo Finance

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