The Direxion Daily Gold Miners Index Bull 2X Shares (NUGT), a leveraged exchange-traded fund designed to deliver twice the daily performance of gold mining stocks, experienced a sharp intraday plummet of 21.89% on Friday. This dramatic decline reflects a severe correction in the underlying gold mining sector.

The sell-off was driven by a significant retreat in gold prices from recent record highs, prompting widespread profit-taking activity across the precious metals complex. Spot gold plunged over $400 in a single session, briefly breaking below the $5,000 per ounce level. Market analysts attribute this correction to investors locking in gains following gold's parabolic ascent, which had seen prices surge more than 20% in just two weeks.

Further pressure came from news that former Federal Reserve Governor Kevin Warsh is being nominated as the next Fed Chair, a move perceived as hawkish which boosted the U.S. dollar and made dollar-denominated gold more expensive for foreign buyers. The sentiment was compounded by prominent market voices, including Ark Investment Management's Cathie Wood, warning about bubble risks in the gold sector and suggesting that a rising U.S. dollar could potentially deflate the rally.