SPDR Gold and VanEck Gold Miners: 2019 Top Picks' Mid-Year Update

07/18/2019 5:00 am EST


Mary Anne & Pamela Aden

Co-Editors, The Aden Forecast

Mary Anne and Pamela Aden, resource sector experts and editors of The Aden Forecast, selected SPDR Gold Trust (GLD) as a top conservative idea and VanEck Vectors Gold Miners (GDX) as a favorite speculation. The ETFs have risen 11% and 21%, respectively.

SPDR Gold Trust is an exchange-traded fund for gold that closely tracks the gold price. And VanEck Vectors Gold Miners is an ETF that moves with a composite of gold shares.

In our opinion, both of these gold-related investments are poised to headed higher. There are several reasons for our outlook.

Gold is a safe haven and it moves up strongly during times of uncertainty. Gold has actually been on the rise for the past 3 1/2 years, but it’s now broken above strong resistance levels of the past six years. It’s gaining  momentum and it’s set to rise further. 

And when gold moves up, gold shares tend to outperform. That’s currently happening and it’s a bullish sign.

Gold likes low interest rates, and interest rates are on the decline. With rates poised to fall even further, thanks to a sluggish economy and pressure from President Trump, it makes gold more attractive.

Why? Because gold doesn’t pay interest, so low rates eliminates the competition between these two sectors. Low interest rates are also putting downward pressure on the U.S. dollar. A weaker dollar is also very bullish for gold because the two generally move in opposite directions.

That is, a rising gold price means it is stronger than the U.S. dollar. Gold is already stronger and at new highs in terms of many other currencies, and again, this is a bullish sign.

Overall, we expect these trends to continue and these will likely keep gold’s bull market going until year end, and most likely beyond. Our advice is to buy and hold both GLD and GDX and ride the bull for as long as it lasts.

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