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Direxion Daily Gold Miners Bull 3x Shares ETF – Gold Suffers From Weak U.S. Job Numbers

The Direxion Daily Gold Miners Bull 3x Shares ETF (NYSEARCA: NUGT ) and other gold ETFs have had a tough session this week as the yellow metal settles at a one-week low in yesterday’s session. Gold for December delivery fell $9.10, or 0.8%, to settle at $1,124.50 per ounce on Comex yesterday. The loss marked the seventh loss for the yellow metal in nine trading sessions, and it brought the bullion to its lowest settlement since Aug. 27. Yesterday’s loss was due to fears ahead of key economic data in the U.S. (for employment numbers) and from Europe about the ECB’s position on monetary policy. It turns out that those fears are justified as the weak jobs number and dovish signals from the ECB suggests. The two factors are already forcing the downward pressure on gold and the gold ETFs are feeling the hit. As of 12:10 p.m. ET, NUGT was down 5.50% to $2.66. Weak Jobs Number Weakens Gold The Labor Department reported that the U.S. economy saw the lowest job gains in the last five months in August. In August, U.S. employers added 173,000 new jobs and the unemployment rate fell to 5.1%. The job gain was better that the economists’ estimates but it still small in comparison the job gains from April through July. The drop in unemployment rate to 5.1% marks the lowest level since April 2008. Analysts believe that the weak job numbers will increase the odds that the fed will raise interest rates this month. Andrew Grantham, economist at CIBC World Markets notes “We’re a little closer to it being game on rather than game over for a September rate hike.” Carl Tannenbaum, chief economist at Northern Trust Co. notes that “Unfortunately, this number while good is neither so strong as to make clear the need for a rate hike nor so weak that it makes standing pat a clear option.” Brian Bethune, an economist at Tufts University says the fed will want to act now as economy enters slow mode. In his words, “the bottom line is the Fed is just going to sit here.” Rate Hike More Likely Than Ever From the above, it is obvious that analysts agree that a September rate hike is in the works. The fed will be meeting on Sept. 16 to 17 and it seems that they will most likely agree on a rate hike. Fed Vice Chairman, Stanley Fischer has been vocal about the need to raise interest rates this month. An increase in interest rates will put gold and its ETFs such as NUGT at a disadvantage in relation to interest-yielding assets. In the next two weeks, the market will have a clue on the feds position about raising interest rates; in the meantime, the volatility in the price of the bullion is here to stay. Original Post Share this article with a colleague

Gold M&A Outlook Changes, The Direxion Shares Exchange Traded Fund Trust Lower

The Direxion Shares Exchange Traded Fund Trust (NYSEARCA: NUGT ) was down on Wednesday as the market for the metal remains rocky as traders look for clues about the Federal Reserve’s decision making in the months ahead. Meanwhile some firms in the industry are seeing the collapse in the price of the metal as a reason to go on a spending spree. Oceana Gold Corporation ( OTCPK:OCANF ) announced a $900m offer to acquire Romarco Minerals ( OTCPK:RTRAF ), on Tuesday. Larger gold makers are looking at weaker share prices as a reason to consolidate the industry. Mick Wilkes, CEO at Oceana Gold, says that “You have to stay at the dance and engage with opportunities as they come up.” Gold makers buy gold Last Friday Metals X Limited said that it would buy gold projects from RNI and Panoramic Resources. The firm’s CEO Peter Cook says that “When the market caps of some of the juniors are very low, that’s the time to make a corporate takeover.” Mr. Cook said that the costs and time associated with buying out smaller firms was the major factor keeping him from taking in more. “I’ve got five companies I’d like to have a crack at … but as soon as I do one I am paralyzed for six months from doing anything else,” he says. For those holding onto gold as a metal, the deals aren’t going to do much good. The price of the commodity has fallen massively in recent months as traders in the U.S. try to guess when the Federal Reserve will hike rates , and traders in China sell out in order to pay for the massive stock market declines. It also doesn’t seem to making much difference to those exposed to the metal through NUGT. The Direxion Shares Exchange Traded Fund Trust down Despite the spurring M&A movement in the gold world, there’s seems little chance of the NUGT moving higher. The number one factor that weighs on the shares of gold miners is the price of the metal, and that isn’t shifting higher. On Tuesday, as gold prices inched higher, Ira Epstein, a broker with Linn & Associates told the Wall Street Journal that “certain Fed members are getting hawkish.” He reckons that “The Fed wants to get aggressive and raise the rates, and that is going to give a bid to the dollar and that is going to be negative gold.” No one is able to tell where the price of gold, or that of the NUGT is going to head in the coming months. Recent price moves have, however, made traders much more wary of putting the metal in their portfolios. Calls for the price of gold to hit $800 or even $350 haven’t helped matters, but it seems that there are big issues in the market. Firms like Oceana Gold Corporation, and Metals X are going to take advantage as long as prices stay low. Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Bulls Weigh On Gold As Losses Mount In NUGT

The Direxion Daily Gold Miners Bull 3x Shares ETF (NYSEARCA: NUGT ) shares were down yet again on Friday morning after a day of huge losses on Thursday. Most of Wall Street has turned its back on gold as the U.S. heads toward a rate rise later on in 2015, and the risk of both inflation and deflation melt away. We’ve seen a wide range of negative outlooks on gold since the fall in the price of the metal began earlier in July. The bulls have, for the most part, stayed out of the limelight. There’s good reason for that. Most of those who are bulls now were bulls three months ago, and they’ve been proven wrong. Right now most are trying to rework their models or abandon gold altogether. Here’s what some of them are saying. Stepping back, doubling down, and staying quiet An old adage says to buy into gold as soon as the last bull has left town. We’re not sure if that’s true just yet, but it’s clear that many former gold bugs have left their positions and are trying to recover losses in the market. Jonathan Barratt, chief investment officer at Ayers Alliance has long been happy to put money in gold, but he’s turning against the metal right now. “From a technical perspective,” he told CNBC, “it doesn’t look hot.” He said that the price of the metal has “broken through some very critical areas.” On the other hand, some observers are doubling down on the metal. In a report published on July 3, Bank of America Merril Lynch forecasted that gold prices would rise to $1,300 in 2016 . “We are on the cusp of a bull market,” reads the report. The investment house says that “gold can be supported even if the U.S. central bank turns less accommodative, as long as the Fed just normalizes monetary policy.” John Paulson and David Einhorn, two hedge fund managers known for their bets on gold , will have to disclose their positions in ETFs and miners of the metal next month. The final date for 13F filings is on August 14. Then, or perhaps the day before, we’ll be able to see if gold’s big hedge fund fans are still backing the metal. Gold ETFs remain a danger Leveraged ETFs carry risks that don’t exist in pure metal trading. That’s why NUGT has lost more than 70 percent of its value in the last three months. There are very few outspoken Wall Street voices who will advise a bet on the ETF as a result. Leverage is dangerous, and it’s not for the faint of heart. The NUGT ETF tracks an index of gold mining shares and seeks to deliver returns of three times those on the index. The price of NUGT has become very separate from the price of gold as a metal in recent weeks as a result. Even gold bulls aren’t likely to advise a bet on the ETF. The risks are simply too great for all but the most thrill-seeking of traders. There’s no outspoken bulls of the index in the limelight, and there isn’t likely to be, at least until the price of gold turns around.