Gold prices continue to build momentum behind a strong start to 2025. But investors might be missing out on gold miners. Gold mining stocks may not have reached their full potential. As such, they might pose a better value option for long-term investors and short-term traders alike.
“The price of gold has soared, but gold stocks haven’t kept up,” Barron’s noted. “And that’s an opportunity for investors to play the catch-up trade in the precious metal’s miners.”
Newmont Corporation, the world’s largest gold mining company, recently posted a strong Q4 earnings report. Another top miner, Barrick Gold, also reported better-than-expected earnings, giving further notice that gold mining stocks are worth watching.
“With gold stocks set to breakout of a huge accumulative 4-year base, the beaten down and left for dead in 2024 mining sector is ripe for a 2025 mean reversion,” Kitco News reported.
From a pure performance perspective, gold miners have had the upper hand on gold prices within the past year. Using the NYSE Arca Gold Miners Index as a gauge, it’s up 10% over gold prices through February 24. With the demand for gold set to rise, ancillary services like mining should also benefit, helping to create trade opportunities for gold miners.
2 Leveraged Options
As gold continues to push higher, Direxion offers a pair of leveraged ETFs worth considering to add leverage to trades for profit maximization. Given the risky nature of leveraged ETFs, experienced traders should only use them at their discretion.
When it comes to broad gold mining exposure, consider the Direxion Daily Gold Miners Bull 2X ETF (NUGT). The fund seeks daily investment results that equate to double the performance of the NYSE Arca Gold Miners Index. The index is a modified market-cap-weighted index comprising publicly traded companies that operate globally in developed and emerging markets and are involved primarily in mining for the precious metal.
When markets are trending higher or lower, small-cap companies can make profound moves in either direction. If gold prices can continue their upward momentum, another option is to play small-cap gold miners with the Direxion Daily Jr Gold Miners Bull 2X ETF (JNUG). The fund gives 200% exposure to the daily performance of the MVIS Global Junior Gold Miners Index. That index tracks the performance of foreign and domestic micro-, small- and midcap companies that generate revenue from mining or similar activities.
For more news, information, and strategy, visit the Leveraged & Inverse Channel.
