Gold prices moved lower for a fifth consecutive week as better-than-expected employment data boosted expectations for at least one more interest rate hike this year. Higher interest rates lead to higher yields that tend to draw capital away from non-yielding precious metals. Silver has performed significantly worse than gold, while platinum has performed slightly better over the past 30-day period.

The Direxion Daily Gold Miners Index Bull 3X Shares ETF (NUGT‚Äč) is one of the most popular ways to play gold prices given its leveraged exposure. Unlike physically backed gold exchange-traded funds (ETFs) such as the SPDR Gold Trust ETF (GLD), NUGT holds a portfolio of companies involved in gold exploration and production. Gold prices may be trading down about 6% over the past 30 days, but the leveraged miner ETF is trading roughly 30% lower over the same time frame. (See also: Gold Miners ETFs Besieged by Outflows.)

Techincal chart showing the performance of the Direxion Daily Gold Miners Index Bull 3X Shares ETF (NUGT)

From a technical standpoint, the ETF broke down from trendline support earlier this month and settled near S1 support at $26.59. The relative strength index (RSI) points to mildly oversold conditions with a reading of 35.02, while the moving average convergence divergence (MACD) has been trending sideways and provides few hints. The overall trend remains bearish, however, with the 50-day moving average well below the 200-day moving average.

Traders should watch for a breakdown from lower trendline resistance at $25.00 to S2 support and prior reaction lows at around $22.93. On the other hand, a rebound from these levels could send prices to re-test trendline resistance at around $30.00. Traders should maintain a bearish bias in the short term given the growing prospect for an interest rate hike, although the yellow commodity could be approaching oversold conditions. (For additional reading, check out: The 4 Most Traded 2X and 3X Gold ETFs.)

Charts courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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