Market volatility has certainly fueled the gains for gold in 2019 as global recession fears continue to push investors toward safe-haven assets. Gold hit a two-week high to start this week’s trading session following week economic data stemming from Europe.
Per a CNBC report, “Spot gold was up 0.5% at $1,524.71 per ounce, after hitting its highest since Sept. 6. U.S. gold futures rose 1.1% to $1,532.40 an ounce.”
Furthermore, the German private sector took a hit as activity shrank for the first time in over six years during the month of September. The manufacturing recession deepened unexpectedly and growth within the service sector lost momentum, according to a survey.
“The weak German PMI numbers gave a little bit of a shock to the stock market and led investors into safety like gold and silver,” said Phillip Streible, senior commodities strategist at RJO Futures.
In the meantime, the capital markets’ eyes are still fixated on a U.S.-China trade deal, which is continuing to steer a heard of investors towards precious metals.
“People are starting to realize that auto sales and production outside of China is actually not so bad and so demand from the industrial sector is stronger than what people thought,” said Jeffrey Christian, managing partner of CPM Group. “In addition to that, there are a lot of investors moving in that market and in such a small, illiquid market, it doesn’t take a lot of investors to drive the price higher.”
How High Does Gold Climb?
The rise in gold has been translating to strength in miners and their associated leveraged funds like the Direxion Daily Gold Miners Bull 3X ETF (NYSEArca: NUGT) as well as the Direxion Daily Jr Gold Miners Bull 3X ETF (NYSEArca: JNUG).
NUGT seeks daily investment results equal to 300% 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 a 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.
Related: Gold, Silver ETFs: Look For More Upside Ahead
JNUG seeks daily investment results equal to 300% of the daily performance of the MVIS Global Junior 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 includes companies from markets that are freely investable to foreign investors, including “emerging markets,” as that term is defined by the index provider.
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