Small- and mid-cap gold miners rise to the top. Meanwhile silver-tracking ETFs were the biggest flops of the day. None of this makes any sense.
Gold spot prices were down on Monday, but that didn’t stop gold miners-tracking exchange-traded funds from rising to the top.
Size might explain it. The junior ETFs have an average market cap of $1 billion compared to their older brothers’ $5 billion. The only other explanation this blogger could come up with is that the junior gold mining ETFs also hold more Canadian stocks than U.S. stocks.
Morgan Stanley’s Evan Kurtz said of his outlook on precious metals in a report published this morning:
Central banks added 24 tonnes to their gold reserves in April with Turkey buying 8.2t and Russia buying 7.2t. Our FX team thinks that within six months, markets have swung from being extremely upbeat on the USD to the opposite, but by now USD sentiment and positioning have gone to extreme levels, suggesting that a minor improvement in the fundamental outlook of the USD or a significant equity market decline could spark a significant USD upward reaction.