Gold is Flat, Gold Miners ETF is on the Move

The Federal Reserve’s Federal Open Market Committee (FOMC) is going to release its latest policy decision in less than an hour and the market is –if you will- on hold. The FOMC statement and Fed Chair Janet Yellen’s press conference this afternoon are yet to decide the direction of some very important economic issues going forward. Meanwhile, gold has been pretty much flat (actually, oscillating between small gains and small losses), as investors await the news.

gold-bullion

SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) is down 0.06% so far today, and up only 1.75% year-to-date. However, performance has been good over the past 3 months, with returns hitting 12.66%. The S&P 500 (INDEXSP:.INX) has barely gained 0.02% today, and is up 6%, year-to-date.

Gold hit a low point yesterday, trading at $1,258.00 an ounce, but closed the day at $1,272.00, down 0.26%. After today’s fluctuations (ranging from $1,266.50 to $1,274.80), gold is currently trading around $1,273.20, which is quite far from the 52-week high of $1,431.90. Selling interest should continue to be limited by several geopolitical issues, including the civil war in Iraq and continuing tensions in Ukraine.

Unlike the commodity itself, gold ETFs were quite active today. Market Vectors Gold Miners ETF (NYSEARCA:GDX), a fund that seeks to replicate as closely as possible the price and yield performance of the NYSE Arca Gold Miners Index, rose 1.13% today. However, the past 3 months’ performance was not very good: the fund lost 26.59%, and returned only 6.48% year-to-date.

SPDR Gold Trust (ETF) (NYSEARCA:GLD)’s case is quite similar; it’s up 0.2% today, but lost 6.98% over the past three months. Returns since the beginning of 2014 only reach 3.71%. This investment seeks to replicate the performance, net of expenses, of the price of gold bullion.

Nonetheless, some of the most interesting activity today took place within two Direxion Gold ETFs. Direxion Daily Jr Gld Mnrs Bull 3X Shrs (NYSEARCA:JNUG) lost 2.21% on Wednesday. Conversely, it has lost 2.24% year-to-date. Direxion Daily Jr Gld Mnrs Bear 3X Shrs (NYSEARCA:JDST)’s performance looks much better. The ETF’s price advanced 3.30% today, and lost 58.4% since January. Both these funds seek 300% of the performance [or inverse performance, respectively] of the Market VectorsTM Junior Gold Miners Index.

 

Disclosiure: Javier Hasse holds no interest in any ETFs or Commodities mentioned.

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