Been a pretty savage sell off in many of the gold stocks...

Been a pretty savage sell off in many of the gold stocks recently and SBM has taken the brunt more than some others.

I'm working on the theory that ETF selling is having a big effect on some of the constituent stocks. Last Tuesday was the first day of fund outflows of the GDXJ ETF this year. The GDXJ has been the marginal buyer all year in our junior gold miners. However the amount of money streaming into the GDXJ ETF is still more than that coming out. It is not so much the ETF selling as much as related shorting and other algorithmic trading that amplifies moves in the share price.


Also had big volumes, see chart here.

https://hotcopper.com.au/threads/the-brains-trust-2017.3143642/page-29#post-23148575

Now the question is: are the GDXJ and stocks leading the gold price lower as is often the case? Australian gold stocks have actually outperformed the A$ gold price this year so there is an argument that this pullback is restoring some more sensible pricing.

In SBM's case I don't think this pullback makes a lot of sense due the great cashflow they are making at present.

I sold all of mine at ~$2.80 in the trading account (still hold in my super) as I was getting a bit worried about a pullback in gold stocks. Now looking to re-enter SBM in the trading account.