Consumer confidence might be down, but gold investors’ spirits are up. Prices for the safe haven precious metal could be pushing higher after American consumer confidence index declined to 100.9 during the month of October.
Per a Kitco News report, “Economists were expecting to see the index at a reading of 102.0.” October’s reading was 40 basis points lower than September’s downwardly revised reading of 101.30.
“Traders closely watch the consumer optimism survey as it is a potential leading indicator for economic growth,” the report explained. “The more optimistic consumers feel, the more likely they are going to spend money and vice versa.”
“Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs,” said Lynn Franco, senior director of Economic Indicators at The Conference Board. There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high," Franco noted.
Investors looking to get gold exposure can look at funds like SPDR Gold Shares (GLD ) and the SPDR Gold MiniShares (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:
- 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 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.
- 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.