On Friday, inflation data met expectations, which kept the U.S. dollar in check and allowed leveraged gold ETFs like the Direxion Daily Jr Gld Mnrs Bull 3X ETF (NYSEArca: JNUG) and Direxion Daily Gold Miners Bull 3X ETF (NYSEArca: NUGT) to post gains.
The consumer price index for December came in line with expectations–down 0.1 percent from November and up 1.9 percent, year-on-year–marking the first decline in nine months. Meanwhile, the cost of living increase over the past 12 months slowed to 1.9 percent from 2.2 percent, representing the first time it’s dropped below the 2 percent since August 2017.
“Overall, inflation risks remain well in check and are well down the list of potential concerns for both the capital markets and the economy,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “That bodes well for 2019 if the Fed can slow the pace of rate hikes or pause outright.”
The latest inflation data prevented gains in the U.S. Dollar Index (DXY), while JNUG rose 1.14 percent and NUGT gained 2.71 percent.
Looking at the one-year chart, both JNUG and NUGT have benefitted in the recent dollar weakness as both ETFs are heading upward towards the 200-day moving average: