Where To Look If The Fed Stays Put

Gold bullion and precious metals exchange traded fund traders are waiting on a bullish signal from the Federal Reserve, with many expecting the Fed to kick the interest-rate-hike can down the road.

Gold ETFs have been strengthening. Over the past three months, the SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) were up about 5.8%, trading just below their 200-day simple moving average.

The more aggressive leveraged gold ETFs DB Gold Double Long ETN (NYSEArca: DGP) jumped 11.4% over the past three months while the ProShares Ultra Gold (NYSEArca: UGL) surged 10.9%.

Comex gold futures are now trading around $1,165.7 per ounce.

Meanwhile, gold miners also experienced a resurgence off the back of strengthening bullion prices. Over the past three months, the Market Vectors Gold Miners ETF (NYSEArca: GDX), the largest and most heavily traded gold miners ETF, increased 13.7% and Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) rose 12.9%. Additionally, the Sprott Gold Miners ETF (NYSEArca: SGDM), the first factor-based gold miners ETF, advanced 17.2% and the Sprott Junior Gold Miners ETF (NYSEArca: SGDJ) gained 12.8%. The gold miner ETFs also moved back above their 50-day simple moving averages Thursday.

Additionally, leveraged long gold miner funds were among the best performing ETFs over the past month. The Direxion Daily Junior Gold Miners Index Bull 3x Shares (NYSEArca: JNUG) and the Direxion Daily Gold Miners Bull 3X Shares (NYSEArca: NUGT) take the 3x or 300% daily performance of a group of large gold miners and junior miners, respectively. JNUG jumped 22.3% and NUGT surged 38.3%. Furthermore, the recently launched ProShares Ultra Gold Miners (NYSEArca: GDXX) and ProShares Ultra Junior Miners (NYSEArca: GDJJ), which take the 2x or 200% daily performance of large miners and junior miners, increased 25.8% and 23.4% over the past month, respectively.

Ahead of the Federal Open Market Committee’s Wednesday, October 28 announcement, gold traders are ramping up bets that the Fed could maintain its near-zero rate policy for longer, with traders holding more gold futures than at any time since 2012, Bloomberg reports.

“We’ve been building up open interest,” George Gero, a vice president of global futures at RBC Capital Markets, told Bloomberg. “That’s a bullish indicator. People are going back to gold because of the likely decision” by the Fed.