Dig Into Precious Metal Strength with These Gold Miners ETFs

Last year’s safe haven scramble saw gold rise to new highs with silver tethering to gold’s success, but it could be the other way around in 2021. Silver prices are jumping, which is helping gold’s cause. ETF traders can play precious metals with a pair of leveraged funds from Direxion Investments.

Rather than play gold directly, traders can use miners via the:

  • 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.

Buoyed by an interest in silver the past week, both ETFs are seeing strength. JNUG is up 11.4% the past five days while NUGT is up 2.43%. With the double leverage, traders can take advantage of these short-term moves.

JNUG Chart

Just to underscore the strength of silver right now, compare the precious metal’s performance to gold the past six months. As investors have been exiting gold through a renewed risk-on thanks to a Covid-19 vaccine, silver is trending higher in terms of its price and the Bloomberg Silver Subindex.

Gold Price in US Dollars Chart

Gold Building Off of Silver’s Shine

Gold investors are willing to yield to silver as long as it benefits them in the process. The latter is finding itself in a media-fueled craze with Reddit traders pushing the price of GameStop stock to stratospheric levels.

Now they’re turning their attention to silver.

“Silver – often dubbed ‘poor man’s gold’ as it is impacted by the same factors as bullion but is much cheaper to buy – has risen nearly 15% since last Thursday, when posts began circulating on Reddit urging retail investors to buy silver mining stocks and iShares Silver Trust, an exchange-traded fund (ETF) backed by physical silver bars, in a similar fashion to the GameStop short squeeze,” a Mining.com article said.

“Since last week’s Reddit discussions to buy long, funds have flowed into the silver market,” Xu Ying, precious metals senior analyst at Orient Securities Research, told Reuters. “In the short term, silver’s rise has little to do with fundamentals. Sentiment to go long is high, the market rally is not over yet.”

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