Gold

ETF Talk: Going for the Gold

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.

Exclusive ETF Talk: Finding Value in Your Brokerage

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.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.