The VanEck Gold Miners ETF (GDX) surged +9.4% on Wednesday night after the US Treasury unexpectedly stepped up its purchases of long-dated bonds, announcing buybacks of at least US$4bn per operation. The surprise intervention sent 30-year Treasury yields ~10bp lower and weakened the US dollar, providing an immediate boost to gold, which jumped more than 4% to its highest since early June. Gold miners magnified the move through their operating leverage, with Newmont (+7.8%), Barrick (+6.7%), Agnico Eagle (+11.2%) and Kinross (+8.1%) all surging higher.
Today’s report title says, “Don’t fight the Fed,” and this intervention in the bond market, albeit by the Treasury, is very supportive of gold and precious metals. We expect the ASX miners to follow suit, with many likely to surge by close to 10% on the open this morning.
- We can see the GDX ETF consolidating around US$100, but a test of new highs looks increasingly likely.
MM is bullish towards the GDX ETF around US$97
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