Supporting the previously controversial sector, the U.S. dollar has quickly weakened. The greenback is being weighed down on speculation that ongoing uncertainty may force the Federal Reserve to refrain from hiking interest rates in the near future. Consequently, a weaker USD makes alternative assets like metals more attractive.
SEE MORE: 31 Gold ETFs Investors Should Size Up
While gold miner stocks and sector-related exchange traded funds look cheap after underperforming broader equities for years, some caution investors against betting too heavily on this area of the market as the sector rallies on strengthening bullion prices.
“In fact, the comeback has seen the Gold Bugs Index breakout (relative to equities) above channel resistance. Although the miners may be due for some cooling off, it’s worth noting that if this trend change resembles recent turns, it may last a while longer yet,” adds See It Market.
For more information on the Gold ETFs, visit our Gold category.
Market Vectors Gold Miners ETF
