They are trading lower today, but there is no denying gold miners exchange traded funds have started 2015 on a torrid pace.
In a repeat of what was seen at this time in 2014, gold miners ETFs dominate the top 10 non-leveraged ETFs of 2015. Yes, the new year is still in its infancy, but coming into Wednesday, six of 2015’s top 10 non-leveraged ETFs were gold or silver miners ETFs, a group including familiar names such as the Market Vectors Gold Miners ETF (NYSEArca: GDX) and the Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) as well as the Global X Silvers Miners ETF (NYSEArca: SIL) and the PowerShares Global Gold and Precious Metals Portfolio (NYSEArca: PSAU). [Don’t Forget These Mining ETFs]
Seasoned traders and investors know that when the likes of GDX and GDXJ, the two largest gold miners ETFs, rally, leveraged equivalents come into focus as well and that is the case again this year. It is easy to see why.
The Direxion Daily Gold Miners Bull 3X Shares (NYSEArca: NUGT) entered Wednesday with a year-to-date gain of 35.1%. NUGT’s small-cap cousin, the Direxion Daily Junior Gold Miners Index Bull 3x Shares (NYSEArca: JNUG), was sitting on a year-to-date gain of 43.5% at the start of trading Wednesday after undergoing a 1-for-10 reverse split last month. [A Reverse Split for JNUG]
Over the past 30 trading days, NUGT and JNUG have seen creation activity, according to Direxion data. In fact, the 30-day average net value of all creation and redemption activity for JNUG and NUGT is among the highest for all Direxion leveraged ETFs.
Investors are displaying a preference for leveraged fare as a means of participating in the miners rally. Since the start of December, JNUG and NUGT have added $200.6 million and $67 million, respectively, while a combined $559.3 million has been pulled from GDX and GDXJ.
Adding to the long gold miners thesis are some bullish technical signs, including GDX’s relative momentum perking up even as the ETF recently made new lows, notes Chris Kimble of Kimble Charting Solutions. That could be a sign of bullish divergence that could give way to positive price action.
Coming into Wednesday, JNUG and NUGT were the two-best performing leveraged bullish Direxion ETFs this month, but only three of the issuer’s leveraged funds have been more volatile than JNUG over the past month.
Direxion Daily Gold Miners Bull 3X Shares
