Metals and miners are in for more pain: Traders

Metals and mining stocks pared losses from the week on Friday, with the gold miners ETF (GDX) surging more than 3 percent. However, some traders say these gains are only temporary, and that there's much more room for metals to fall.

According to Katie Stockton, chief technical strategist at BTIG, GDX has broken through a vital support line in its breakdown, hitting below lows from 2014 and 2008.

"That's a testament to the long-term downtrend," Stockton said Friday on CNBC's "Power Lunch." "GDX has been trending lower, really, for years. And it doesn't really show any signs of reversing that trend, especially with gold meeting resistance after its own relief rally this month."

GDX has fallen more than 22 percent year to date. Gold, which bounced more than 1 percent on Friday, is still down more than 2 percent for the week and 4 percent for the year.

Read More The gold bounce has run its course: Technician

Gina Sanchez of Chantico Global said copper could see a short-term bounce, as major copper producers look to make cuts. However, Sanchez said a slowing economy in China, which is a major consumer of commodities, will continue to push copper and other metals lower.

"There's an enormous stock pileup happening in copper," she said. "China consumes 40 percent of the world's copper and 50 percent of the world's aluminum."

Copper has fallen more than 17 percent year to date.

Although China's central bank announced a cut in interest rates this week, which helped some commodities bounce back, Sanchez said this will be a short-term solution, as well.

Read MoreChina central bank injects $22B into economy

"That stock pileup is an indication of Chinese weakness," Sanchez said. "I think the downward trend is pretty solid."

Want to be a part of the Trading Nation? If you'd like to call in to our live Wednesday show, email your name, number and a question to


Trades to Watch

Trader Bios


Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more