Trading Gold Miners... Either Up or Down
Gold recently hit all-time highs. Of course, my concerns are geopolitical risk, government debt, and inflation. The gold surge has lifted bullish gold mining ETFs, and Direction offers a few ways for investors and traders to participate via Jug. That's your ticker, pronounced like J Nug, J-N-U-G. Then you also have NUGT, which is pronounced like Nugget.
Nugget and Jay Nug are two bullish ways to trade gold miners and junior gold miners, respectively. To your point, gold's been on an unbelievable run, fueled by a multitude of factors, whether it's the geopolitical landscape, whether it's the US dollar denomination kind of fading in certain places, or just inflation running out of control. Gold prices are through the roof as a result. The gold miners, both the major ones and the junior ones, have profited as a result.
If you think about the distinction between the two, the gold miners themselves typically have larger, robust operations. Now, there's some overlap here too with the junior gold miners, but the junior ones tend to be a little bit deeper in the exploration stages and don't yet have operational mines. Now, if gold prices continue to rise, of course, both sides of those can profit.
One other piece of the puzzle that I think traders often overlook with gold miners is oil prices. Oil prices have faced some pressure as well. Again, the geopolitical landscape has certainly helped on that front. When oil prices are lower, it is easier for these gold miners to both get the gold and to explore new mines. That's been another tailwind in favor of the gold miners this year.
Those two things in conjunction with each other, the price of gold and the price of oil, have really benefited the bull side of the trade. If you think either one is getting a bit frothy and these gold miners may have a pullback, we offer bare funds on these as well: Dust and J Dust, JDST. We offer both sides of the trade on gold miners and junior gold miners. It's a matter of what you as a tactical trader believe is the opportunity here going forward.
