Fear Trade Shines as Oil, Equities Break Down (IAG) (SLW) (GDX) (GDXJ)
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Gold and gold mining stocks advanced Monday as weakness in oil and fears about elections in Greece and EU deflation dragged equities lower.
Caterpillar (NYSE: CAT) and its peers were noticeably weak on concerns related to oil's impact on indirect revenue. JP Morgan slapped the stock with a downgrade given these concerns.
More broadly, it was another day of crushing losses in oil-related stocks as WTI slipped below $50 per barrel. Meanwhile, gold futures advanced 1.45% despite USD strength. Bonds also advanced, with yields on U.S. 10-year treasures close to testing 2%. Strength in gold and bonds was confirmed by strength in VIX, suggesting heightened levels of fear in the market.
Gainers included IAMGOLD Corp. (NYSE: IAG), Newmont Mining (NYSE: NEM), Yamana (NYSE: AUY), and Silver Wheaon (NYSE: SLW). Market Vectors Gold Miners (NYSE: GDX) gained 2.3%, while Market Vector Junior Gold Miners ETF (NYSE: GDXJ) jumped 4%.
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