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Direxion inverse gold miners ETF DUST falls 13% as miners rally
The inverse fund is down 13% in Friday trading and has lost nearly 99% over the past decade, while its long benchmark GDX is up 7% after blowout Q2 earnings from major miners.
Direxion Daily Gold Miners Index Bear 2X Shares, ticker DUST, dropped 13% on Friday as gold miners surged, with the long VanEck Gold Miners ETF, ticker GDX, jumping about 7%. Yahoo Finance said the move follows a broader rally in the sector that has been building for weeks.
The outlet pointed to major earnings beats from gold miners, including Newmont, which generated a record $2.2 billion in Q2 free cash flow, and Agnico Eagle, which reported revenue up 35% and both beat EPS estimates. It said the two companies, which reported on July 23 and July 30, respectively, helped drive fresh buying in miners as realized gold prices moved above $4,400 an ounce.
DUST is a leveraged inverse product designed to deliver negative two times the daily performance of the NYSE Arca Gold Miners Index, and the outlet noted that leverage resets every session. It said volatility and “daily mandate” mechanics have contributed to extreme underperformance over longer horizons, with DUST down 18% over the past week, 22% over the past month, 33.6% year to date, 75% over one year, 97% over five years, and 99.91% over the trailing decade, while GDX is up 203% over the same ten-year period.
The selloff in DUST came as the underlying trade stayed firmly on the miners side, leaving the inverse fund “on the wrong side of every tick,” according to Yahoo Finance. The piece framed DUST as a short-term tactical instrument, emphasizing that returns can diverge sharply from a simple minus two times the underlying over multi-day periods.
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