Lets Learn From The Gold Miners
Two months ago, I talked about Gold moving higher, but a higher reward/risk play was to buy the Gold miner, in particular the VanEck Vectors Junior Gold Miners exchange-traded fund, GDXJ, which tracks a basket of smaller gold mining firms.
The GDXJ is less liquid vs the GDX (the large cap gold mining EFT), so a bit more volatile, which means they can move violently in either direction. But the thesis was, as the global economy comes to a halt, then crashes, investors will be buying safe havens, such as gold. And if Gold could get to $1900 over time,
GDXJ should be able to get to $180 or a 6X return.
Gold Bulls...Have A Look At The Junior Gold Mining ETF, GDXJ
Since that post two months ago, Gold is up about 10%, while the GDXJ is up about 15%.
Thus, since Silver just broke a long term down trendline and is about to take out the $17 level on the monthly chart,
another derivative play on Silver would be the Global X Silver Miners ETF, SIL, which tracks the Solactive Global Silver Miners Total Return Index. And since Silver is undervalued relative to Gold (see my post for details),
over the next couple of years, Silver should outpace Gold and thus, SIL should outpace Silver. The targets on SIL (which happen to be monthly supply zones) I will be watching are monthly supply at $55 and $69.50.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
I'm up 4% on Juniors just today.
Miner action is crying buy right now.
Who wants to own a gold mine,!?!
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I prefer to buy individual miners on the gold side as there are always a large distinction in performance given how many are often hedged somewhat to the gold price. Not sure how the Silver miners really do.