Record Hot Inflation Providing Tailwinds for These Leveraged Gold ETFs

If you’re bullish on gold, then you’re seeing lots of green in your trading portfolio. Record hot inflation is providing strong tailwinds for traders not only in gold, but also gold mining ETFs.

The capital markets continue to take in more inflation data, and right now, it’s running hotter than an Arizona desert in August. That said, however, traders must watch whether it’s reached a peak.

“Markets are digesting inflation accelerating to new four-decade highs in March after rising 8.5% from a year earlier,” Kitco reports. “On top of that, the U.S. Producer Price Index (PPI) advanced 11.2% from a year ago in March, posting another new record.”

“Many economists are projecting for March figures to mark a peak in inflation, citing decelerating core inflation, base effects, and some easing in supply chain issues,” the Kitco report adds further.

Gold Price in US Dollars Chart

2 Strong Performers

In the meantime, traders looking to continue playing off the strength of gold can opt for mining funds that can offer double leverage for amplified gains. As such, one ETF to consider is the Direxion Daily Gold Miners Bull 2X ETF (NUGT), which is up 55% for the year.

NUGT invests in swap agreements, futures contracts, short positions, or other financial instruments that, in combination, provide inverse or short leveraged exposure to the index equal to at least 80% of the fund’s net assets. The index is a modified market capitalization-weighted index comprised of publicly traded companies that operate globally in both developed and emerging markets and are involved primarily in the mining for gold and, to a lesser extent, silver.

Another option is the Direxion Daily Jr Gold Miners Bull 2X ETF (JNUG), which is up almost 40% in 2022. JNUG seeks daily investment results of 200% of the performance of the MVIS Global Junior Gold Miners Index.

The index tracks the performance of foreign and domestic companies engaging in gold and silver mining. JNUG featured on the top-performing levered/inverse ETFs list this week, driven by rising inflation concerns across the globe.

JNUG Chart

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