When it comes to precious metals like gold, will another four years of current U.S. president Donald Trump be what prices need to continue higher or will a new administration headed by Democratic hopeful Joe Biden be what it needs? According to a recent article by Forbes contributor Frank Holmes, it doesn’t really matter.
“With the national debt now topping $27 trillion, such a package isn’t good for the government’s balance sheet, but it’s good for gold. Indeed, the yellow metal traded up as much as 1.8 percent on the news,” Holmes wrote. “And I believe there’s additional upside potential—no matter who wins the election. In 22 days, millions of Americans will be betting on ‘red,’ millions of others on ‘blue.’ I’ll be betting on gold.”
“I bought gold for the first time in my life a week ago. I understand the case for gold. We’re on the way to some banana republic situation. Nobody’s worrying about the debt that’s being created," said Omega Advisors chairman and CEO Leon Cooperman in the article.
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:
- 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.