Trading gold prices exposes the short-term trader to a variety of options. Direxion Investments offers three leveraged ETFs to play the latest moves.
The start of the new trading week saw gold prices retreat. Per a CNBC report, “gold fell on Monday in step with a stronger dollar as investors cautiously looked forward to U.S. inflation data that could influence the Federal Reserve’s timeline for easing its bond purchases.”
“We’re almost in this environment where good news is bad news and bad news is good news,” said David Meger, director of metals trading at High Ridge Futures.
All eyes in the gold market will be on the Federal Reserve as Fed Chair Jerome Powell testifies before Congress. Meger noted that inflation data could be the telltale sign for how gold reacts. Per the report, “if inflation data becomes more benign, the Fed would feel slightly less inclined to ease its asset purchases, which should benefit gold, but if it is concerned about inflation, it is more likely ‘to tap the brakes,’ pressuring gold.”
How to Play The Moves
Rather than holding physical gold or selling gold futures, gold miners can give investors a more balanced option. Gold miners prices are tied to the price of the precious metal, but they also have their own fundamentals to consider. Whether it’s a bullish or bearish sentiment, there’s a trade for every investors.
For the bullish gold traders, options include:
- Direxion Daily Jr Gold Miners Bull 3X ETF (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 (NUGT): Seeks daily investment results, before fees and expenses, of 200% of the daily performance of the NYSE Arca Gold Miners 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.
To trade bearishness, there’s the:
- Direxion Daily Jr Gld Mnrs Bear 2X ETF (JDST): DST seeks daily investment results equal to 200% of the inverse of the daily performance of the MVIS Global Junior Gold Miners Index, which tracks the performance of foreign and domestic micro-, small-, and mid-capitalization companies. The fund invests in swap agreements, futures contracts, short positions, or other financial instruments that, in combination, provide inverse or short leveraged exposure to the index equal to at least 80% of the fund’s net assets.
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