Direxion Daily Gold Miners Bull 3X Shrs (NYSE:NUGT) down 34% this month


Dallas, Texas 09/30/2013 (Financialstrend) – Direxion Daily Gold Miners Bull 3X Shrs (NYSE:NUGT) exchange traded fund performance on the browsers has been under the pump for the past month. It has seen a 34% dip in its valuation in the last 30 days. It had shed close to 8% of its share value through the whole of last week. This was in spite of a slight recovery the stock staged on the last trading day of the week, when it went up by 0.14% in comparison to its closing price on September 26.

This weakness of the gold ETF can be linked to various research papers brought out by investment houses which across the board predict a downward movement in global gold prices. One such report is from Citigroup. Its lead analysts Edward L. Morse and Heath R. Jansen have predicted “gold prices to recede further over the reminder of this year to settle at $1250 per ounce by December end.”

CITI report on gold price

The duo explain that this would be on the back of broader economic improvements and increased focus of the investment community on probable change in stance of the Federal Reserve on reducing its stimulus package. The thinking behind this report seems to indicate that as the unemployment rates gradually drop down to levels that Fed has in mind as a bench mark indication of return of investment confidence the more likely it is that the tapering of the stimulus package to kick in. The decision windows to effect such changes in stimulus are during the October 29 and 30 meeting of FOMC or later in the year during December 17 and 18. If the stock markets continue to stay buoyant and if the unemployment rates drop further down to manageable levels, the Citibank analysts think that the Fed Governor is likely to bite the bullet and pull back stimulus. This in turn is expected to drive the price of Gold further down.