CA - GDX: Several Factors Make This Gold Miners ETF A Buy Right Now
2024-05-30 09:40:28 ET
Summary
- Central Banks have stepped up buying gold ever since the invasion of Ukraine.
- Central Banks move slowly, but are unlikely to revert course once they're going.
- China could be in the early stages of recovery from an economic downturn.
- Miners have operating leverage vs. the price of gold and should benefit greatly from rapid price increases.
The VanEck Gold Miners ETF ( GDX ) looks like a decent buy to me. The main reasons are the fact that gold has been performing quite well over the past year even as interest rates have increased rapidly. The higher interest rate environment should make it more difficult to bring excess supply online. Perhaps the most important catalyst for a shift in gold markets could be the freezing (potentially followed by seizing) of Russia's dollar denominated assets after the invasion of Ukraine. Whether these actions are right or wrong, it creates a precedent. Countries that want to determine their own path in the world may want to reconsider holding enormous reserves that don't reside in their sphere of control....
GDX: Several Factors Make This Gold Miners ETF A Buy Right Now