Gold has been on a solid run this year, outperforming the broader market index. The bullion hit a series of new all-time highs in recent sessions, topping $2,664 per ounce following the Fed rate cuts. The weak economic data and geopolitical tensions in the Middle East also drove the price higher.
In tandem with the higher gold price, ETFs in the gold space have surged, with many hitting new 52-week highs. 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. We have highlighted five ETFs from the gold mining space that touched new highs in the latest trading session and are leading the rally. These are Themes Gold Miners ETF AUMI, iShares MSCI Global Gold Miners ETF RING, Global X Gold Explorers ETF GOEX, VanEck Gold Miners ETF GDX and VanEck Junior Gold Miners ETF GDXJ.
The Fed, last week, slashed key interest rates by 50 bps to 4.75%-5% after holding it at a 23-year high for 14 consecutive months since July 2023. This marked the first rate cut since 2020 to address slowing economic growth. The central bank projects two more rate cuts of another 50 bps in its final two meetings this year, due in November and December. It indicates another 100-bps rate cut next year and a 50-bps cut in 2026, which means four rate cuts in 2025 and two in 2026 (read: Fed Initiates Rate Cuts: Top-Ranked Growth ETFs to Buy).
Lower rates raise the yellow metal’s attractiveness compared to fixed-income assets such as bonds. Notably, gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity costs of holding non-yielding bullion and weaken the U.S. dollar. The prospect of lower rates battered the dollar, enabling gains in precious metals.
The weak U.S. data bolstered the case for deeper rate cuts, which will further provide support to the gold price. The Conference Board revealed that Consumer Confidence in September touched the lowest level since August 2021 due to growing concerns about the labor market and the overall economic outlook.
The ongoing conflict between Israel and Hezbollah has bolstered demand for gold as a safe-haven asset. Recent airstrikes and rising casualties have added to market uncertainty, driving investors toward gold to hedge against geopolitical risks. This is because gold is considered a store of wealth for investors. It is often used as a means of preserving wealth during times of financial and political uncertainty and usually does well when other asset classes struggle.
Further, strong physical buying from central banks and investors in Asia has also been a pillar of support.
Gold ETFs at New Highs
Themes Gold Miners ETF (AUMI) – 52-Week High: $39.21
Themes Gold Miners ETF seeks to track the Solactive Global Pure Gold Miners Index, which identifies the largest 30 companies by market capitalization deriving their revenues from gold mining. It holds 29 stocks in its basket, with Canadian firms accounting for 51.4%, followed by Australian firms with a 29.6% share.
Themes Gold Miners ETF has accumulated $2.3 million in its asset base. It charges 35 bps in fees per year and has soared 40.3% so far this year (read: 5 ETFs Up More Than 35% in the First Nine Months).
iShares MSCI Global Gold Miners ETF (RING) – 52-Week High: $34.56
iShares MSCI Global Gold Miners ETF offers exposure to companies that derive the majority of their revenues from gold mining. It follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 35 securities in its portfolio. Canadian firms take more than half of the portfolio, while the United States takes the next spot at 22.3% share.
RING is the cheapest choice in the gold mining space, charging just 39 bps in fees and expenses. It has been able to manage assets worth $569.1 million and has risen 37.9% this year.
Global X Gold Explorers ETF (GOEX) – 52-Week High: $34.43
Global X Gold Explorers ETF provides exposure to companies involved in the exploration of gold deposits and tracks the Solactive Global Gold Explorers & Developers Total Return Index. It comprises 50 stocks. Canadian firms dominate the fund’s return at 49.2%, followed by Australia (28.7%) and the United States (9.3%).
Global X Gold Explorers ETF is unpopular and illiquid, with AUM of $43.9 million and has gained 37.9%. The expense ratio comes in at 0.65% (read: 5 Sector ETFs Scaling New Highs on Fed Minutes).
Market Vectors Gold Mining ETF (GDX) – 52-Week High: $41.59
Market Vectors Gold Mining ETF is the most popular and actively traded gold miner ETF with AUM of $15.6 billion. It follows the NYSE Arca Gold Miners Index, which measures the overall performance of companies involved in the gold mining industry. Market Vectors Gold Mining ETF holds 64 stocks in its basket. Canadian firms account for about 42% of the portfolio, while the United States (20.2%) and Australia (10.7%) round off the top three spots.
Market Vectors Gold Mining ETF charges 51 bps in annual fees and has gained 30% this year.
VanEck Vectors Junior Gold Miners ETF (GDXJ) – 52-Week High: $51.25
VanEck Vectors Junior Gold Miners ETF offers exposure to small-capitalization companies that are involved primarily in the mining of gold and/or silver and tracks the MVIS Global Junior Gold Miners Index. Holding 92 stocks in its basket, Canadian firms dominate the fund’s portfolio with 52.2%, while Australia (17.7%) and Peru (6%) round out the top three.
VanEck Vectors Junior Gold Miners ETF has AUM of $5.6 billion and charges 52 bps in annual fees. It has gained 29.8% this year.
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Get it free >>VanEck Gold Miners ETF (GDX): ETF Research Reports
VanEck Junior Gold Miners ETF (GDXJ): ETF Research Reports
iShares MSCI Global Gold Miners ETF (RING): ETF Research Reports
Global X Gold Explorers ETF (GOEX): ETF Research Reports
Themes Gold Miners ETF (AUMI): ETF Research Reports
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