Gold prices continue to push past $2,600 an ounce, giving it more than a 27% gain for the year. In turn, more gold miners are looking to shore up their operations. This is indicated by an increase in mergers and acquisitions.
Additional market volatility as the presidential election looms has been pushing more investors toward safe haven assets like gold. As such, the precious metal has been hitting new record highs with momentum squarely behind it. Gold prices were sideways to start the year. But they’ve been on an upward trajectory since the beginning of March.
Gold miners have been benefiting from the price rally. That’s giving them more reason to expand their current operations via mergers and acquisitions, as outlined in a Bloomberg article. Deal making in the gold mining industry has been on the rise. But mining companies are doing their due diligence this time around by paying more attention to spending.
“With gold prices at a record high, mining companies are back hunting for deals while trying to reassure investors that they’ve learned from past mistakes of overspending,” the Bloomberg noted. “There has been a flurry of activity in recent months, with Gold Fields Ltd.’s $1.6 billion purchase of Osisko Mining Inc. and AngloGold Ashanti Ltd.’s $2.5 billion acquisition of Centamin Plc. That has sparked speculation over what could be next, with signs that more companies are working to ink deals.”
As gold prices continue pushing higher, gold miners can also reap the benefits of the precious metal’s rise. On that note, Direxion’s ETF product suite of leveraged and inverse funds can offer short-term traders opportunities to maximize gains.
2 Ways to Trade Gold Mining
One option to trade broad gold mining exposure is the Direxion Daily Gold Miners Bull 2X ETF (NUGT). The fund seeks daily investment results that equate to double the performance of the NYSE Arca Gold Miners Index. The index is a modified market-cap-weighted index comprising publicly traded companies that operate globally in developed and emerging markets and are involved primarily in mining for the precious metal.
Additionally, small-cap companies can make profound moves to the upside when a rally is underway. That said, another option to capitalize on gold’s momentum is the Direxion Daily Jr Gold Miners Bull 2X ETF (JNUG). The fund gives 200% exposure to the daily performance of the MVIS Global Junior Gold Miners Index. That index tracks the performance of foreign and domestic micro-, small- and midcap companies that generate revenue from mining or similar activities.
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