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Introduction

The precious metals sector experienced the steepest single-day decline yesterday in its various stock prices since June 2013. This article explains why and outlines the performance of  5 ETFs that best represent the evolvement of a cross-section of the gold/solver equities sector yesterday, last month, and YTD. 
 

Why Did Gold and Silver Bullion and Mining Equities Plunge Yesterday?

Gold and silver bullion and mining equities plunged yesterday (October 21) due to aggressive profit-taking after record highs, a strengthening U.S. dollar, and fading safe-haven demand amid easing geopolitical tensions. Here are the catalysts in details:

• Profit-Taking After Major Rallies: Investors who rode the surge into record territory began locking in gains, triggering a wave of selling across bullion and mining stocks.
• Strengthening U.S. Dollar: The U.S. dollar index rose sharply making precious metals more expensive for international buyers reducing demand and accelerating the decline in spot prices and ETF valuations.
• Easing Geopolitical Tensions: Diplomatic signals from President Trump and China suggested reduced risk of escalation, softening the appeal of gold and silver as safe-haven assets causing investors to rotate out of their defensive positions in gold and silver holdings.
   

Our Gold/Silver ETFs Portfolio

As I mentioned in the Introduction my Gold/Silver ETFs Portfolio of 5 ETFs represents a cross-section of the gold/solver equities sector and the constituents are identified below with their performances yesterday, in September, and YTD, a description of the make-up of each and its market capitalization, the number of constituents in each. and a chart of the portfolio's performance YTD.

1. VanEck Gold Miners ETF (GDX): DOWN 9.4% on October 21st; UP 20.9% In September; UP 114.7% YTD
   • Profile: consists of larger-cap gold producers
   • # Constituents: 51
   • Avg. Market Capitalization: $4.3B
2. VanEck Junior Gold Miners ETF (GDXJ): DOWN 10.4% on October 21st; UP  23.7% In September; UP 122.5% YTD
   • Profile: consists of junior and mid-tier gold producers
   • # Constituents: 99
   • Avg. Market Capitalization: $833M
3. Sprott Junior Gold Miners ETF (SGDJ): DOWN 10.6% on October 21st; UP 24.5% In September; UP 115.2% YTD
   • Profile: consists of small- to mid-cap companies engaged in the exploration, development, or early-stage (not full-scale) production of gold. 
   • # Constituents: 33
   • Avg, Market Capitalization: $300M
4. Global X Silver Miners ETF (SLV): DOWN 10.9% on October 21st; UP 23.3% In September; UP 111.6% YTD
   • Profile: consists of top silver producers and some gold-silver hybrids
   • # Constituents: 44
   • Avg. Market Capitalization: $823M
5. U.S. Global GO GOLD and Precious Metals Miners ETF (GOAU): DOWN 9.5% on October 21st; UP 20.5% In September; UP 98.1% YTD
   • Profile: consist of Royalty companies that receive a percentage of revenue or profit from a mine (e.g., 1–5% of gross sales) while Streaming companies that pay upfront for the right to purchase a portion of future metal production at a fixed, discounted price (e.g., $450/ozt gold).
   • # Constituents: 33
   • Avg. Market Capitalization: $1.2B
      

Summary

Our Gold/Silver ETFs Portfolio was DOWN 10.2% yesterday, was UP 22.8% in September and is UP 111.8% YTD.
 

Portfolio Performance Chart
 

Conclusion

The pullback in precious metals yesterday was the sharpest one-day decline in over a decade. but I’m not worried and neither should you be. Keep things in perspective, avoid panic, and stay focused on the very bright long-term outlook for precious metals. Read Gold & Silver Equities Are Up Dramatically YTD And Greater Returns Are GUARANTEED Going Forward! Here's Why and Frenzied Stampede Into Gold Stocks Coming Soon! Here's Why

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