An election week alone is giving the capital markets enough to handle, but in the background is is data signaling how the economy is holding up during the pandemic. With all the uncertainty abound, gold is ticking higher as the service sector lags according to the latest data.
“Gold edged up slightly as momentum in the service sector disappointed in October, according to the latest data from the Institute of Supply Management (ISM),” a Kitco News article said. “The Non-Manufacturing Purchasing Managers Index was at a reading of 56.6% in October, down from September’s 57.8%. The 1.2 percentage-point decrease surprised the markets, with consensus expectations calling for the index to come in at 57.5%.Readings above 50 are seen as a sign of economic growth – the farther an indicator is above or below 50, the greater or smaller the rate of change.”
“This reading represents a fifth straight month of growth for the services sector, which has expanded for all but two of the last 129 months,” the report said.
In the meantime, the uncertainty narrative should continue feeding into gold prices. This bodes well for the SPDR Gold Shares (GLD ), which is one of the most popular ETFs in the world, offering exposure to an asset class that has become increasingly important as a safe haven amid the pandemic.
Bullish gold investors can also use miners as a play on the precious metal:
- 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 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.