Going for the gold has been a wise strategy with a bull run in the precious yellow metal since the beginning of 2024.
With the Fed cutting interest rates last week, investors are continuing to keep a watchful eye on the precious metal. It is worth mentioning that, historically, gold has had an inverse relationship with interest rates.
This week, gold has hit an all-time high. With current economic uncertainty, the growing U.S. debt burden and ongoing central bank buying, gold prices could well continue to rise.
Gold prices have soared since earlier this year and closed near a record high of $2,694.40 per ounce on Monday night, Sept. 24. Gold futures have risen over 25% year to date.
Now, as my Successful Investing subscribers already know (if you aren’t one, you are missing out), investing in the yellow metal is by no means new to me.
VanEck Gold Miners ETF (GDX) is the first gold miners exchange-traded fund (ETF) launched in United States. GDX attempts to replicate the price and performance of the NYSE Arca Gold Miners Index (GMNTR), which tracks the performance of companies involved in gold mining.
The non-diversified fund normally invests at least 80% of its total assets in common stocks and depositary receipts of companies involved in the gold mining industry.
Investment in gold mining stocks provides leveraged exposure to gold prices. GDX allows investors to profit from rising gold prices through several of the industry’s largest companies.
Additionally, the ETF offers high liquidity, which is valuable in the ever-changing landscape of the current market.
GDX has a one-year return rate of 41.97% and, as of Sept. 24, has a year-to-date return rate of 30.05%.
The ETF’s holdings include some of the largest global gold mining companies, including Newmont Corporation (NYSE: NEM), Agnico Eagle Mines LTD (NYSE: AEM), Barrick Gold Corp (TSE: ABX), Wheaton Precious Metals Corp (NYSE: WPM), Franco-Nevada Corp (NYSE: FNV), Anglogold Ashanti PLC (NYSE: AU), Gold Fields Ltd (NYSE: GFI), Northern Star Resources Ltd (ASX: NST) and Kinross Gold Corp (TSE: K).
The fund includes holdings from several regions around the world, including Canada, Africa and Australasia. Almost 80% of its assets are allocated in non-U.S. stocks.
There are always risks associated with investing, so it’s important to carefully consider the uncertainty and the potential returns before making any investment decisions.
As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.
