Gold prices are up 8% for the year after taking a breather towards the tail end of 2024 following the election of President Trump. The precious metal sustaining its rally could continue to feed gains for gold-focused ETFs.
Furthermore, various factors are supporting the case for the yellow; namely, for investors seeking safe haven investments amid market uncertainty. With a new presidential administration in place and the Federal Reserve at an inflection point regarding interest rate policy, investors are loading up on safe haven assets like gold.
“Gold’s record-breaking rally isn’t likely to slow down any time soon, as the market casts about for economic safe-havens,” the Wall Street Journal said, noting that the precious metal is currently on a six-week run.
Per the WSJ, StoneX’s Fawad Razaqzada noted that the metal’s rally is the result of “a mix of factors–persistent geopolitical uncertainties, inflation concerns, central bank easing, and steady demand from central banks and retail investors.”
Much will depend on President Trump, economic data, and the Federal Reserve’s next moves, Razaqzada explained.
“The Trump administration’s proposed tariffs–as well as his pro-growth agenda–are stoking inflationary pressures in the U.S. economy and elevating gold’s importance as a strategic asset,” added the WSJ.
“The last few days have demonstrated how gold thrives as both a reaction to immediate market stress and a proactive hedge against longer-term instability,” said the World Gold Council’s Joe Cavatoni.
Leverage Gold Miners
If the yellow metal can maintain its momentum, look for the Direxion Daily Jr Gold Miners Bull 2X ETF (JNUG ) to continue exhibiting upside. The fund is already up close to 40% for the year, making an indirect play on rising prices through miners.
Another momentum mover for JNUG is its focus on small-cap equities. Small-cap companies can make profound moves to the upside when a rally is already underway, thereby benefiting JNUG.
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.
If the metal’s prices recede, another option is to play the other side with the Direxion Daily Jr Gold Miners Bear 2X ETF (JDST ). Both ETFs allow traders the opportunity to profit regardless if prices trend higher or lower, allowing for a greater degree of flexibility.
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