Market uncertainty amid the Covid-19 pandemic and the forthcoming U.S. presidential election should help fuel more gains for gold prices. Another major factor related to Covid-19 is more stimulus measures, which could also continue to be a prime mover for gold prices.
“Gold rose Thursday to stage a partial rebound from a more than one-week low a day earlier, buoyed by optimism over the renewed prospects for some sort of U.S fiscal stimulus,” a MarketWatch report said. “Prices held onto their gains after data on Thursday showed a larger-than-expected reading on U.S. first-time jobless claims.”
“Gold sank when President Donald Trump pulled the plug on fiscal stimulus negotiations with Congress, reducing the prospect of more reflationary deficit spending, but the precious metal has found support as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin ‘talk about airline rescues and Trump says he wants more $1,200 [stimulus]checks,’ Adrian Ash, director of research at BullionVault, told MarketWatch,” the report added.
Investors looking to get gold exposure can look at funds like SPDR Gold Shares (NYSEArca: GLD) and the SPDR Gold MiniShares (NYSEArca: GLDM). Precious metals like gold offer investors an alternative to diversify their holdings, and like other commodities, gold will march to the beat of its own drum compared to the broader market.
As a backdoor play, ETF investors can get gold exposure 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 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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