prvtrader 11:09 am on Friday, March 18, 2016

NUGT question

If GC is down today; why is NUGT up?

Ramie 11:18 am on Friday, March 18, 2016

NUGT tracks GDX (the gold miners ETF) at 3:1, not GLD or other representative of spot gold or gold futures. While highly correlated with gold, the miners are not perfectly correlated so some days you say a divergence or at the very least moves that don’t index with each other as well.
vxxkelly 11:25 am on Friday, March 18, 2016

You have to be careful just looking whether or not /GC is up or down. It does not open and close at the same time the markets do. You get a much better idea if you look at the daily chart or better yet, look and see what the price of /GC was at 4pm eastern time yesterday. Since that is the baseline as to whether $NUGT is higher or lower. Doing that you can compare apples and apples. So as of this moment, Gold is basically flat to where it was at yesterday’s market close. Now, $GDX/$NUGT doesn’t just trade with Gold, it also trades along with the $XME. On any given day it might follow gold or the other miners. We’ve seen it do both.

Today, Gold flat, Miners up, Gold Miners up.
sasquatchonline 11:28 am on Friday, March 18, 2016

I checked the correlation a couple weeks ago. The correlation coefficient between GDX and GLD is .33 since the inception of GDX, so it doesn’t really follow GLD too closely. Like Jeff was saying NUGT/GDX follow companies with other issues than the spot gold price. They are highly dependent on the cost of diesel fuel, labor, etc.
prvtrader 11:39 am on Friday, March 18, 2016

Thanks for the information….