Gold has been thriving amid the market uncertainty, but hope of a coronavirus vaccine could be keeping gold prices at bay in the meantime. A CNBC report noted that “the U.S. Food and Drug Administration approved the emergency use of blood plasma in COVID-19 patients and on a report the Trump administration may fast-track a vaccine candidate.”
What does this mean for gold prices in the short term?
“While COVID-19 vaccine developments and improving economic data present near-term headwinds to gold, low and negative interest rates, a weaker U.S. dollar, and expectations for further stimulus keep the balance of risks to the upside,” said Standard Chartered analyst Suki Cooper in the CNBC report.
For gold to encounter more bullishness, certain factors could help its cause for even higher prices.
“Gold is just consolidating right now with stock indexes at record highs. It really needs a bigger catalyst, it needs additional fiscal stimulus, it needs inflation to pick up, in order to get really going,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Traders who are sensing a buy-the-dip opportunity can also play movements in gold via miners 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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