Gold miner ETFs recently reached a nine-week high thanks to a recovery after the steep sell-off. Gold producers still show positive technical and fundamental aspects that could provide further support.
Market Vectors Gold Miners ETF (NYSEArca: GDX) is about 20% higher from its May 16 intra-day low. However, GDX was down 3.6% Thursday as spot gold prices dropped 2.8%. [Gold Miner ETF Rebound Draws Bullish Options Trade]
Gold futures dipped below $1,600 per ounce after the Federal Reserve kept quiet on its strategy to aid the U.S. economy, reports Matt Day for the Wall Street Journal. [Central Bank Stimulus Would Rally Gold ETFs]
If the Federal Reserve engaged in further monetary easing, gold and other precious metals would gain on the depreciation in the paper currency.
“I don’t think we’re going to get a lot of clarity on Fed actions here today, so I think gold is reflecting that disappointment,” Frank Lesh, a broker with FuturePath Trading, said in the article.
Over the past two weeks, with the aid of lower oil prices to help cut back costs, the GDX ETF has crossed over its 50-day moving average.