The Federal Reserve made its message clear to keep rates steady and low for quite some time. Gold prices, in turn, were able to keep their upward momentum and could sustain that trajectory for a few more years, according to market experts.
“The gold market is maintaining its buying momentum as the Federal Reserve expects to keep interest rates at current levels through 2023 as they look for economic growth to pick up,” a Kitco News article reported. “As expected the Federal Reserve left interest rates unchanged within its zero-bound range. Although interest rates are expected to remain low, the central bank is slightly more optimistic on economic growth through the end of the year.”
“The committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” the central bank said in its recent monetary policy statement.
A few funds to look at that make a play on miners as opposed to gold itself:
- 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.