Gold Stocks Extend Losses, GDX Hits 6-Week Low

Gold stocks extended their losses in early afternoon trading on Thursday, with the Market Vectors Gold Miners ETF (GDX) tumbling as much as $4.98, or 7.8%, to $59.30 per share.  The weakness in gold stocks and the GDX was fueled by a sell-off in gold futures, which dropped to an intra-day low of $1,723.20 per ounce, amid broad-based liquidation on Wall Street.

The yellow metal did pare its losses this afternoon, however, to trade lower by $64.60, or 3.6%, at $1,743.50 per ounce.  Gold stocks in Canada plunged as well, with the S&P/TSX Global Gold Index off by 4.0% at 420.90 alongside the GDX.

With today’s decline in gold stocks, the GDX reached its lowest level since August 12 – six weeks ago.  In addition, the GDX returned to negative territory for the month of September, by 5.6%.

In recent months the GDX has finally begun to outperform the gold price, but such was not the case today.  On a year-to-date basis the GDX is now lower by 3.8%, compared to a 21.7% rise for the yellow metal.

Notable gold stocks moving lower included the GDX’s three largest components – Barrick Gold (ABX), Goldcorp (GG), and Newmont Mining (NEM) – which fell 7.7%, 6.5%, and 3.7%, respectively.  The Market Vectors Junior Gold Miners ETF (GDXJ), a basket of small- and mid-cap gold stocks, retreated even further than the GDX, by $2.79, or 8.0%, to $32.31 per share.