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For investors seeking momentum, Market Vectors Gold Mining ETF (GDX - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up 35.2% from its 52-week low price of $17.28 per share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
GDX in Focus
This fund seeks to track the overall performance of companies involved in the gold mining industry. Companies to be included in the portfolio must derive at least 50% of total revenues from gold mining and related activities. Canadian firms account for more than half of the portfolio, while Australia (17.2%) and the United States (14.3%) round off the top three. The fund charges 53 bps in annual fees (see: all the Materials ETFs here).
Why the Move?
The gold mining corner of the broad market has been an area to watch lately given the rise in gold price. The Fed’s cautious outlook toward rake hike bode well for the yellow metal. Lower interest rates will continue to weigh on the dollar and raise the yellow metal’s attractiveness as it does not pay interest like fixed-income assets. Additionally, still unresolved trade tensions, Brexit concerns as well as political infighting in the United States and Europe led investors’ flight to safe havens. Notably, gold is considered a great store of value and hedge against market turmoil. Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market.
More Gains Ahead?
It seems that GDX might remain strong given a higher weighted alpha of 13.10% but with high risk as depicted by 20-day volatility of 21.22%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
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Gold Mining ETF (GDX) Hits New 52-Week High
For investors seeking momentum, Market Vectors Gold Mining ETF (GDX - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up 35.2% from its 52-week low price of $17.28 per share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
GDX in Focus
This fund seeks to track the overall performance of companies involved in the gold mining industry. Companies to be included in the portfolio must derive at least 50% of total revenues from gold mining and related activities. Canadian firms account for more than half of the portfolio, while Australia (17.2%) and the United States (14.3%) round off the top three. The fund charges 53 bps in annual fees (see: all the Materials ETFs here).
Why the Move?
The gold mining corner of the broad market has been an area to watch lately given the rise in gold price. The Fed’s cautious outlook toward rake hike bode well for the yellow metal. Lower interest rates will continue to weigh on the dollar and raise the yellow metal’s attractiveness as it does not pay interest like fixed-income assets. Additionally, still unresolved trade tensions, Brexit concerns as well as political infighting in the United States and Europe led investors’ flight to safe havens. Notably, gold is considered a great store of value and hedge against market turmoil. Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market.
More Gains Ahead?
It seems that GDX might remain strong given a higher weighted alpha of 13.10% but with high risk as depicted by 20-day volatility of 21.22%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>