One of the biggest winners from this week’s central bank meetings is gold.
Tariff war, Brexit, and a slowing real economy are tying central banks’ hands. Rate hikes are no longer the default option. In contrast, some modest cuts are now built into investor expectations.
Amidst this return to the accommodative monetary policy, gold, which pays no dividend, will be an anchor haven asset. Prices have soared from $1,280 to $1,400. More importantly, this explosive rally saw the metal overcome the massive resistance at $1,365 (see Featured Chart). Whenever an instrument breaks multi-year resistance, chances of a further rally are high.
At the time writing, gold is trading near $1,400.
Gold’s stunning rally is setting fire under gold miners. In the US, there is a popular gold miner ETF called VanEck Miners (GDX). This ETF broke the important resistance at $24 recently – and looks set to break the $25 range resistance (see below).
For more speculative buys, take a look at the VanEck Junior Miners (GDXJ). This ETF tracks smaller – thus more speculative – precious metals miners. If gold’s advance persists, this ETF may complete a base breakout and return to its 2016 highs.
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Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.