Gold Mining ETF (GDXJ) Hits New 52-Week High

For investors seeking momentum, VanEck Vectors Junior Gold Miners ETF (NYSE:GDX) GDXJ is probably on radar. The fund just hit a 52-week high, and is up 45.4% from its 52-week low price of $25.91 per share.

But 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 on where it might be headed:

GDXJ in Focus

This fund offers exposure to small-capitalization companies that are involved primarily in the mining for gold and/or silver. Canadian firms account for 45% of the portfolio, while Australia (25%) and South Africa (10%) round off the top three. The fund charges 53 bps in annual fees (see: all the Materials ETFs here).

Why the Move?

The gold mining corner of the broad market has been an area to watch lately given the rise in gold price. The Fed’s intention to cut interest rates anytime soon bodes well for the yellow metal. Lower interest rates will continue to weigh on the dollar and raise the yellow metal’s attractiveness as it does not pay interest like fixed-income assets. Additionally, still-unresolved trade tensions, Brexit concerns and geopolitical tensions led investors’ flight to safe havens. Notably, gold is considered a great store of value and hedge against market turmoil. Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market.

More Gains Ahead?

It seems that GDXJ might remain strong given a higher weighted alpha of 30 but with high risk as depicted by 20-day volatility of 39.66%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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VanEck Vectors Junior Gold Miners ETF (GDXJ): ETF Research Reports

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