With market volatility having dampened considerably since the beginning of the year, as stocks trade near all-time highs, the SPDR Gold Shares (NYSEArca: GLD), the largest gold ETF, and other gold-backed ETFs are trading lower this quarter. But some major Wall Street banks see more gains coming for bullion in 2020.
That includes Goldman Sachs, which believes “fear-driven demand” will boost bullion in the year ahead.
“Gold cannot fully replace government bonds in a portfolio, but the case to reallocate a portion of normal bond exposure to gold is as strong as ever,” Goldman analysts including Sabine Schels said in a recent note, reports Bloomberg. “We still see upside in gold as late-cycle concerns and heightened political uncertainty will likely support investment demand.”
In fact, some commodities market observers believe the yellow metal can continue delivering solid showings in 2020. GLD remains higher by nearly 15% year-to-date as bullion has been one of 2019’s best-performing commodities.
For investors looking to trade for even larger potential gains, and are willing to accept the commensurate risks that come with highly leveraged instruments, the Direxion Daily Gold Miners Index Bull and Bear 3X Shares Leveraged ETFs (NUGT, DUST) could hold a place in their portfolios.
Direxion Daily Gold Miners Index Bull 3X Shares ETF (NUGT)
The Direxion Daily Gold Miners Index Bull 3X Shares seek daily investment results, before fees and expenses, of 300% of the performance of the NYSE Arca Gold Miners Index. There is no guarantee the funds will meet their stated investment objectives.
The NYSE Arca Gold Miners Index (GDMNTR) is a modified market capitalization weighted index comprised of publicly traded companies that operate globally in both developed and emerging markets, and are involved primarily in mining for gold and, to a lesser extent, in mining for silver. The Index will limit the weight of companies whose revenues are more significantly exposed to silver mining to less than 20% of the Index at each rebalance date. The Index may include small- and mid-capitalization companies and foreign issuers. One cannot directly invest in an index.
This leveraged ETF seeks a return that is 300% of the return of their benchmark index for a single day. The funds should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day.
Direxion Daily Gold Miners Index Bear 3X Shares ETF (DUST)
The Direxion Daily Gold Miners Index Bear 3X Shares seek daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the performance of the NYSE Arca Gold Miners Index. There is no guarantee the funds will meet their stated investment objectives.
The NYSE Arca Gold Miners Index (GDMNTR) is a modified market capitalization weighted index comprised of publicly traded companies that operate globally in both developed and emerging markets, and are involved primarily in mining for gold and, to a lesser extent, in mining for silver. The Index will limit the weight of companies whose revenues are more significantly exposed to silver mining to less than 20% of the Index at each rebalance date. The Index may include small- and mid-capitalization companies and foreign issuers. One cannot directly invest in an index.
This leveraged ETF seeks a return that is -300% of the return of their benchmark index for a single day. The funds should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day.
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