Gold ETFs Advance As Bullion Bull Run Continues

Gold is continuing its bullish run on Wednesday, as gold futures broke $2070 an ounce amid continued enthusiasm for the metal. Now some analysts are looking for even loftier numbers.

Analysts and investors see the fallout from the coronavirus crisis, along with continuing tensions between the US and China, as a reason to drive up the price of bullion, which is helping to benefit ETFs like the SPDR Gold Shares (GLD), which advanced another 1% on Wednesday.

Market strategist Margaret Yang says she forecasts gold to continue advancing in the coming weeks and months, explaining, “The mid-to-long-term prospect of gold and other precious metals remains bullish against the backdrop of low-interest rate environment and fiscal and monetary stimulus.”

Peter McGuire from XM.com also said he sees gold reaching “$2,200 by Christmas” with precious metals brethren silver, platinum, and palladium also procuring strong gains.

But some gold analysts are looking for even bigger gains over the next couple of years, and exhort investors to buy now before it’s too late.

Frank Holmes, a longtime gold bull, believes that gold investors should be buying on the dips, as the gold market could reach $4000 during this price cycle.

“I have a rational reason that gold could go to $4000 over the next couple of years because of economic forces. But I believe there’s a huge gap like Ray Dalio says. There’s a gap of inequality on income… and that means there’s gonna be a huge gap between fiscal and monetary policies. That has historically always been bullish for gold,” explained Holmes.

So what is the best way to get on board the bull run in gold? Holmes advocates buying on a dip, which is common in a dramatic move like this one historically.

“Now every time you have a secular bull market there are many 10% corrections. It’s a big capitulation. So you can easily get a 10% correction in stocks if you get a 3% correction in bullion. So it’s just recognizing that 3 to 1 ratio that’s important, and do you have the stomach to weather it?” said Holmes.

ETF investors can get gold exposure on a pullback like Holmes mentions via miners ETFs which are rallying modestly Wednesday using the following funds:

VanEck Vectors Gold Miners (NYSEArca: GDX): seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the NYSE® Arca Gold Miners Index®. The index is a modified market-capitalization weighted index primarily comprised of publicly traded companies involved in the mining for gold and silver.
Direxion Daily Jr Gold Miners Bull 3X ETF (NYSEArca: JNUG): seeks daily investment results, before fees and expenses, of 200% of the daily performance of the MVIS Global Junior Gold Miners Index. The index includes companies from markets that are freely investable to foreign investors, including “emerging markets,” as that term is defined by the index provider.
Direxion Daily Gold Miners Bull 3X ETF (NYSEArca: NUGT) : seeks daily investment results, before fees and expenses, of 200% of the daily performance of the NYSE Arca Gold Miners Index. The fund invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments, such as swap agreements, and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index is comprised of publicly traded companies that operate globally in both developed and emerging markets, and are involved primarily in the mining for gold and, in mining for silver.

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Gold ETFs Advance As Bullion Bull Run Continues

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