Gold miners were smacked overnight as precious metals reversed sharply lower when many would expect and were positioned for higher prices – long gold has been one of the most crowded positions over recent months. The GDX gold miners ETF closed down ~9% with the miners not bouncing with the broader US market. Considering the large “long” gold position across global markets and the disappointing reaction overnight for the bulls, we can see a similar style washout unfolding to the one experienced in February.
Precious metals had been expecting/pricing in two rate cuts in 2026, but that’s now come into question as surging oil prices cloud the inflation picture, which is not ideal when markets have been very bullish towards precious metals, and universally bearish the $US, which is now bouncing on safe haven demand.
- We would consider increasing our gold exposure if/when the GDX retests the $US90 area, or another ~10% lower.
