Nevertheless, gold miners have made an impressive rebound this year, with GDX surging 24.9% year-to-date. GDX was up another 6.9% Thursday on the continued rally in gold prices.
On Thursday, the SPDR Gold Shares (NYSEArca: GLD), the largest ETF backed by physical holdings of gold, and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) were 4.0% higher.
Gold has been strengthening as global volatility pushed investors back into safe-haven assets.
“The safe-haven seekers are moving back. We recommend clients add gold to their portfolios as insurance, if things turn out really bad, there will be much more upside,” Julius Baer analyst Carsten Menke, told CNBC.
Moreover, U.S. economic weakness and speculation of the Federal Reserve pushing back on another interest rate hike have contributed to a depreciating U.S. dollar, which has also helped support USD-denominated gold bullion.
“We believe the US Federal Reserve (Fed) is potentially behind the curve with risks of inflation rising by more than their expectations and the markets in the longer-term,” according to ETF Securities. “Furthermore, we believe the US Dollar strength is likely to wane, taking some of the gold-negative pressure away.”
Max Chen contributed to this article.