Rebounding bullion prices are pulling up gold and silver stock exchange traded funds, with junior miners breaking above their short-term trends and looking to test long-term resistance levels.
The Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) was up 0.5% Wednesday while the PureFunds ISE Junior Silver ETF (NYSEArca: SILJ) increased 2.1%. Over the past week, GDXJ surged 8.1% and SILJ jumped 6.3%. Both small-cap miner ETFs broke above their 50-day simple moving averages and are hovering below their 200-day trend line. [Silver ETFs Look to Regain Lost Luster]
Large-cap focused Market Vectors Gold Miners ETF (NYSArca: GDX) was up 0.4% Wednesday and the Global X Silvers Miners ETF (NYSEArca: SIL) was 0.9% higher. Over the past week, GDX gained 3.0% while SIL climbed 5.2%. Both large-cap miner ETFs are looking to test their 50-day resistance.
The precious metals miners are being supported by stronger bullion prices, with gold heading for its longest rally in six weeks. COMEX gold futures are now trading around $1,261 per ounce Wednesday and COMEX silver futures were hovering around $19.2 per ounce.
Traders are using precious metals to hedge against uncertainty after the World Bank cut its global economic growth projection, Bloomberg reports.
“There is some safe-haven buying,” David Meger, the director of metal trading at Vision Financial Markets, said in the article. “The World Bank lowering forecast for the U.S. is a matter of concern.”