Gold prices fueled by Covid-19 uncertainty could give way to geopolitical uncertainty and central bank policy. U.S.-China relations are once again on the rocks while global interest rates remain low, which could both fuel more gold price increases.
“Nobody is talking about this yet but gold is definitely getting a boost from renewed geopolitical uncertainty,” said Phillip Streible, market strategist at Blue Line Futures, via a Kitco News article.
“I think at this point in time the market is likely to continue to see a lot of volatility, but I still believe in the uptrend due to the fact that Jerome Powell almost certainly do whatever it takes to keep the markets relatively loose,” wrote Christopher Lewis in FX Empire. “As long as that is the case, the US dollar will continue to lose value, and thereby people will continue to drive into the precious metals markets. Gold of course is the first place people go to, so it does make quite a bit of sense that we continue to find plenty of opportunities going forward.”
Traders who are sensing an opportunity can 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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