To test the market’s conviction in the recent sell-off that has occurred in gold-land, I had a look at the current short position against some of the big names that live in this sector. More specifically, it’s the change in this short position that was of real interest.
The basic assumption was that short positions across the sector should have increased since the meltdown began if the market has in fact convinced itself that gold and gold stocks are in a downward spiral. However, this doesn’t appear to be the case.
Tabled below are the results. The commodity, represented by the SPDR Gold Trust ETF (NYSEMKT: GLD), was included for some context.
| Company Name |
Short Interest (MM shs) |
% Shs o/s |
% Chg since Apr 1 |
| SPDR Gold ETF (NYSEMKT: GLD) |
15.4 |
3.5% |
-39.2% |
| Barrick Gold (TSX:ABX,NYSE:ABX) |
6.4 |
0.6% |
-20.6% |
| Goldcorp (TSX:G,NYSE:GG) |
4.1 |
0.5% |
-15.2% |
| Yamana (TSX:YRI,NYSE:AUY) |
6.5 |
0.9% |
9.4% |
| Agnico-Eagle (TSX:AEM,NYSE:AEM) |
1.6 |
1.0% |
16.2% |
Source: Capital IQ
We see that the commodity, along with the sector’s two biggest names, Barrick Gold (TSX:ABX,NYSE:ABX) and Goldcorp (TSX:G,NYSE:GG) have in fact seen their short interest shrink since the beginning of April. Mid-tier firms Yamana (TSX:YRI,NYSE:AUY) and Agnico-Eagle (TSX:AEM,NYSE:AEM) have experienced an increase.
In the context of total shares outstanding however, all of these short positions are very minor and unlikely to have impacted the stocks in a material way.
Foolish Takeaway
Because gold has historically been seen as a hedge against the world going bad, being long this sector was like shorting the rest of the market. Now that the commodity has lost some of its lustre, it will be interesting to monitor these figure to see if this behaviour changes with time.
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Fool contributor Iain Butler is short $32 July 2013 put options on Goldcorp, $14 June 2013 put options on Yamana and owns shares outright in Barrick Gold and Yamana. The Motley Fool has no positions in the stocks mentioned above.
