Tailwinds in the gold market are forming in such a way that prices could zoom past the record market set in 2011, according to Citigroup Inc. A confluence of low interest rates, a movement to safe haven assets amid the coronavirus pandemic, and record inflows into exchange-traded funds (ETFs) are fueling optimism for the precious metal.
Per a MarketWatch report, according to Citigroup, the precious metal “is expected to climb to an all-time high in the next six-to-nine months, and there’s a 30% probability it’ll top $2,000 an ounce in the next three-to-five months.”
“Nominal gold prices have already posted fresh records in every other G-10 and major emerging market currency this year,” the Citigroup analysts noted.
Per the MarketWatch report, Citigroup is among a large group of analysts who are expecting the precious metal to continue its breakout. Per the report, gold “has surged 19% this year to the highest since 2011 as the pandemic drove investors to havens, while easier monetary policy and other measures to shore up economies also supported demand.”
ETF investors can get gold exposure via miners using the following funds:
- VanEck Vectors Gold Miners (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 (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 (NUGT ): seeks daily investment results, before fees and expenses, of 200% of the daily performance of the NYSE Arca Gold Miners Index. The fund invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments, such as swap agreements, and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the 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.
