Gold ended 2024 outperforming the S&P 500 and the rally may not yet be over in the new year. Various factors support gold’s momentum to continue its rally, opening the path for traders to consider gold mining exchange traded funds (ETFs).
Central bank buying and a safe haven scramble to gold amid geopolitical tensions in 2024 spurred gold higher. Those factors still remain in 2025, adding to gold’s price support.
A prime mover for gold prices will continue to be how the U.S. Federal Reserve handles interest rate policy. Those who were expecting rate cuts to happen swiftly may not get their wish granted as stubborn inflation continues to keep the Fed from cutting rates at a rapid pace. If the Fed still has issues tamping down inflation, more investors could flock to gold as a hedging strategy. Likewise, if rates fall, then a weakening dollar gives gold the runway to soar higher.
Gold’s price now currently stands at just above $2,600. The prospect of the precious metal hitting about the $3,000 mark is a possible goal, but market experts like Goldman Sachs and Bank of America don’t see it happening until maybe the second half of the new year. That price prospect will be more clear as the first half of 2025 plays out. In the meantime, traders can position themselves in the event of an ongoing gold rally.
A Pair of Mining ETFs to Consider
Traders looking to capitalize on gold continuing its rally could consider gold miners. With demand for gold rising, this could result in upside for ancillary services supporting the gold industry such as mining and exploration.
Given this upside potential, one option to trade broad gold mining exposure is the Direxion Daily Gold Miners Bull 2X ETF (NUGT ). The fund seeks daily investment results that equate to double the performance of the NYSE Arca Gold Miners Index. The index is a modified market-cap-weighted index comprising publicly traded companies that operate globally in developed and emerging markets and are involved primarily in mining for the precious metal.
For traders looking for additional upside via small cap companies, they can consider the Direxion Daily Jr Gold Miners Bull 2X ETF (JNUG ). Small-cap companies can make profound moves to the upside when a rally is already underway. Also, JNUG provides traders with 200% exposure to the daily performance of the MVIS Global Junior Gold Miners Index. That index tracks the performance of foreign and domestic micro-, small- and midcap companies that generate revenue from mining or similar activities.
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