For investors seeking momentum, US Global GO GOLD and Precious Metal Miners ETF GOAU is probably on the radar. The fund just hit a 52-week high and has moved up 59% from its 52-week low of $14.00 per share.
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 of where it might be headed:
GOAU in Focus
US Global GO GOLD and Precious Metal Miners ETF offers investors access to companies engaged in the production of precious metals either through active (mining or production) or passive (owning royalties or production streams) means. It charges 60 bps in annual fees (see: all the Materials ETFs here).
Why the Move?
Gold has been an area to watch lately, given the surge in the metal’s price. The bullion scaled multiple record highs after the Fed, last week, cut interest rates by a larger-than-usual margin of 50 bps. Gold becomes more appealing when interest rates fall compared to fixed-income assets such as bonds, which would yield weaker returns in a low-interest-rate environment. Meanwhile, China has announced rate-cut measures to boost its economy, lifting gold prices.
In fact, metal miners are the biggest beneficiaries of the surge in gold price as these act as a leveraged play on the underlying metal prices and thus tend to experience more gains than their bullion cousins in a rising metal market.
More Gains Ahead?
GOAU might remain strong, given a weighted alpha of 51.71 and a lower 20-day volatility of 33.17%. There is definitely still some promise for investors who want to ride on this surging ETF.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
