Global Uncertainty Should Keep Fueling Gold Prices

Gold is continuing its reign among not just precious metals, but alternative assets in terms of popularity. It seems that everyone wants a piece of gold as global uncertainty surrounding the pandemic should continue to keep prices afloat.

“Gold traders are still relatively bullish on growing global geopolitical uncertainty on what will follow in the months ahead,” an FX Empire article noted. “Gold bulls are riding on macros that include rising global COVID-19 caseloads, soaring geopolitical risks, the high volume of liquidity in the money market triggered by global central banks, and a blurred economic outlook will keep demand for the precious metal upward.”

“Gold prices have gained about 35% in 2020 as global fiscal policymakers; seek to provide aid to an already battered global financial system by providing unprecedented global stimulus policies,” the article added.

Investors looking to get gold exposure can look at funds like SPDR Gold Shares (NYSEArca: GLD)and the SPDR Gold MiniShares (NYSEArca: GLDM). Precious metals like gold offer investors an alternative to diversify their holdings, and like other commodities, gold will march to the beat of its own drum compared to the broader market.

Gold Price in US Dollars Chart

Gold Price in US Dollars data by YCharts

As a backdoor play, ETF investors can get gold exposure 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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