The Market Vectors Gold Miners ETF (GDX) is rallying as investors worry about growth and interest rates fall.
GDX is up about 2 percent since last Friday, making it one of the best-performing major exchange-traded funds (ETF).
The big move occurred on Wednesday after the Federal Reserve stunned markets by renouncing interest-rate increases for the rest of the year. That’s a pretty fast change from an institution committed to four hikes as recently as October.
Trouble overseas also hurt sentiment. President Trump kept a hard line on Chinese trade and indicated he’ll make sharper demands on Europe next. Separately, European manufacturing data showed activity slowing more than expected in the region.
News like that can help gold, which is often viewed as a safe haven. Precious metals also benefit from weaker growth because they’re an alternative to economically sensitive assets like equities.
Companies in the Market Vectors Fund
GDX focuses on the major companies producing gold. Its top holdings include:
Barrick Gold (GOLD): The Canadian company is the world’s top producer of the yellow metal.
Newmont Mining (NEM): A Colorado-based firm also operating in Australia, Africa and South America.
Newcrest Mining: Australia’s biggest player. It doesn’t trade in the U.S.
Franco-Nevada (FVN): The Canadian company collects royalties on properties rather than operating mines.
Wheaton Precious Metals (WPM): The largest “streaming company.” This is a kind of financing business that essentially lets WPM profit from gold and silver recovered at other types of mines, like those extracting copper and iron ore.
The most important catalyst impacting GDX is the underlying price of gold. Futures on the metal (@GC) could also have a a bullish triangle pattern, with a series of higher lows as they push against a key resistance line.
Investors interested in gold miners may want to know about these related funds:
SPDR Gold Trust (GLD): This ETF directly tracks the price of physical gold. Each share essentially controls one-tenth of an ounce.
Market Vectors Junior Gold Miners (GDXJ): This ETF holds smaller gold miners than those in GDX.
Direxion Daily Gold Miners 3X (NUGT): A highly leveraged trading vehicle that moves about triple the amount of GDX, in the same direction.
Direxion Daily Gold Miners 3X Bear (DUST): A highly leveraged trading vehicle that moves about triple the amount of GDX, in the opposite direction.
This post is the first in a regular “ETF of the week” series. It will focus on exchange-traded funds with interesting news or price changes.
David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial.
Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.
The ARK Innovation ETF has chopped in a range for the last two years, and some traders may expect a push back to longer-term lows. The first pattern on today’s chart is the rounded top in February and March. It was slightly below the peak of ... For more,...
Energy stocks have led the market this year, and now they've pulled back. The S&P Select Energy SPDR fund (XLE) jumped to $98.97 last Friday -- the highest level in almost a decade. It pulled back this week and touched $93.73 before bouncing. That was just $0.04...
Uranium miner Cameco has been stuck at an old high, and one big options trader is bracing for a potential drop as earnings approach. This large transaction was detected yesterday in CCJ, unfolding in several blocks over the course of the afternoon: Some 30,000 May 45...
Leaving TradeStation
You are leaving TradeStation.com for another company’s website. Click the button below to acknowledge that you understand that you are leaving TradeStation.com.
This event is hosted on YouCanTrade. The information for this event is being provided for informational and educational purposes only.
You are leaving TradeStation Securities and going to YouCanTrade. YouCanTrade is an online media publication service which provides investment educational content, ideas and demonstrations, and does not provide investment or trading advice, research or recommendations. YouCanTrade is not a licensed financial services company or investment adviser and does not offer brokerage services of any kind.
TradeStation Securities, Inc. provides support and training channels hosted on YouCanTrade, its affiliate. Other than these support and training channels, any services offered by YouCanTrade are not sponsored, endorsed, sold or promoted by TradeStation Securities and it makes no representation regarding any YouCanTrade goods or services.
To acknowledge you are leaving TradeStation Securities to go to YouCanTrade, please click
This website uses cookies to offer a better browsing experience and to collect usage information. By browsing this site with cookies enabled or by clicking on the "ACCEPT COOKIES" button you accept our Cookies Policy. To block, delete or manage cookies, please visit your browser settings. Restricting cookies will prevent you benefiting from some of the functionality of our website.ACCEPT COOKIES