Bullion-Based ETFs Are on a Bumpy Ride in 2015
Bullions Rose, Precious Metals Eagerly Await the Rate Hike
GLD ETF
The center of attraction for gold lovers is still the Fed’s policy-setting meeting in December. The anticipated interest rate hike will cause precious metals to lose their luster and fall to lower levels. Investors have shed out positions in bullion-backed funds like the SPDR Gold Shares (GLD). GLD is at its lowest level since September 2008.
The chance of a December rate hike is most likely priced in the precious metals. A loss in the dollar caused the prices to rise on Friday. The euro eased the impact on Thursday.
Waiting for mid-December
The leveraged Direxion Daily Gold Miners Bull Gold 3X (NUGT) had a bumpy ride in 2015. Currently, it has a YTD (year-to-date) loss of 71.8%. Most of the ETFs rose during the past week. GLD and NUGT rose by 2.7% and 30.4%, respectively, on a five-day trailing basis.
Most of the mining companies also saw positive returns for the past week. Canadian mining companies like Alamos Gold (AGI), First Majestic Silver (AG), and B2Gold (BTG) rose by 16.4%, 12.4%, and 16.8%, respectively, on a five-day trailing basis. These three companies account for 3.2% of the Market Vectors Gold Miners ETF (GDX). GDX rose by 10.3% on a five-day trailing basis.
All of the precious metals lovers have their eyes set on mid-December for more directions on the bullion price movement. Even bullion-based ETFs and mining companies depend on the interest rates moving. However, there have been instances during the past few trading days where the mining sector rose despite the losses in the four precious metals—gold, silver, platinum, and palladium.
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