A beaten-down ETF tracking small-cap gold miners was the best-performing unleveraged fund this week as U.S. stocks and precious metals both posted gains.
Market Vectors Junior Gold Miners (NYSEArca: GDXJ) was on track for a weekly advance of 10% in afternoon trading Friday. The ETF hit an all-time low in late June and is still down more than 50% year to date. [Small-Cap Gold Miner ETF Bounces]
Bullion-backed ETFs also rebounded after three weeks of losses. SPDR Gold Shares (NYSEArca: GLD) was up nearly 5% for the week.
Gold was set for its biggest weekly rally in almost two years as prices recovered after Federal Reserve Chairman Ben Bernanke said the U.S. economy requires highly accommodative monetary policy for the foreseeable future.
Stock investors also ran with Bernanke’s seemingly dovish comments. The S&P 500 was on track for a weekly gain of 2.6%, rising for the third straight week. Meanwhile, the Dow climbed 1.9% and the Nasdaq Composite added 3.1%. [Lucky 13 for Nasdaq-100 QQQ ETF?]
Conversely, volatility-linked products such as iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX) and ProShares Ultra VIX Short-Term Futures (NYSEArca: UVXY) were among the steepest decliners this week. VXX was down nearly 9% for the week.
Next week’s economic data features reports on retail sales, business inventories, consumer prices, homebuilder confidence, housing starts and the Fed’s beige book.
Full disclosure: Tom Lydon’s clients own GLD.