Gold assets look more attractive in a low interest rate environment as the precious metal is more competitive against assets that pay low interest, like bonds. Additionally, if the Fed holds off on further rate hikes, it would suggests the economy is not as strong, which would also help gold attract safe-haven demand.
GDX “has $6.6 billion in assets and is up 66 percent so far this year but has seen $514 million in outflows. This oddity is no doubt connected to the billions that were poured into GDX over the past several years as investors bloodied their hands trying to catch a falling knife. GDX had lost 75 percent in the three years leading up to 2016,” according to Bloomberg.
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Tom Lydon’s clients own shares of GLD.