Amid additional dollar weakness, gold prices again flirted with all-time highs Monday. It has extended its status as one of this year’s best-performing assets. Not to be lost in the shuffle are bullion miners. The NYSE Arca Gold Miners Index is higher by more than 91% YTD. That’s far outpacing the showings of spot gold and physically backed gold ETFs. That index’s surge could put the spotlight on the Direxion Daily Gold Miners Bull 2X ETF (NUGT).
NUGT is one of the forefathers of the leveraged gold ETF frontier. It attempts to deliver double the daily performance of the NYSE Arca Gold Miners Index. For aggressive short-term traders, NUGT could be useful at a time when gold possesses an array of tailwinds. These include expectations the Federal Reserve will lower interest rates later this month. That could weigh on the already flailing dollar. And that would likely boost gold prices in the process because commodities are priced in dollars.
ETF NUGT Has Ingredients for More Gains
As of midday Monday, gold prices were hovering around $3,477 per troy ounce. But some market observers believe $5,000 ounce is coming, perhaps as soon as the first quarter of next year. That’s not an invitation to buy and hold NUGT. But should that price forecast prove accurate, it implies there will be ample opportunities to deploy NUGT in short-term fashion in the months ahead. With bullion already flirting with records, the path of least resistance remains higher. And that could propel NUGT over the near term.
“We expect that sustained demand, falling real yields, and fiscal and geopolitical strains will propel gold to $5,000 by the end of Q1 2026. The conditions are already in place, and momentum is building,” noted deVere Group CEO Nigel Green.
Among the overlooked catalysts for NUGT is the point that despite the yellow’s stellar showing this year, gold mining stocks, including those in NUGT’s index, remain underowned. Plus, valuations on those stocks aren’t demanding. That indicates fund managers may be compelled to nibble at the group. Add a rate cut or two into the mix and the outlook for gold miners becomes even more attractive. That could spell opportunity for risk-tolerant traders with NUGT.
“Gold traditionally benefits in a low-rate environment, and we predict cuts from the Federal Reserve this month,” added deVere’s Green. “Every cut reduces the appeal of cash and bonds. Combined with ongoing inflation, heavy government borrowing, and geopolitical uncertainty, this strengthens gold’s case.”
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