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

For investors seeking momentum, VanEck Junior Gold Miners ETF GDXJ is probably on the radar. The fund just hit a 52-week high and is up about 80% from its 52-week low price of $31.00/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 of where it might be headed: 

GDXJ in Focus

The underlying MVIS Global Junior Gold Miners Index tracks the overall performance of the gold mining industry, which may include micro and small capitalization companies. The product charges 52 bps in annual fees (See: All Materials ETFs). 

Why the Move?

Gold has been an area to watch lately, given the surge in the price of the yellow metal. Gold prices are inversely related to the value of the greenback as gold is priced in dollars. Invesco DB US Dollar Index Bullish Fund UUP lost 1.3% over the past week, providing an opportunity for gold to rally.

Considered a store of wealth and a safe-haven investment, prevailing geopolitical tensions and economic uncertainties further support the upside in the yellow metal. And since mining stocks often act as leveraged plays of the underlying metal, gold mining stocks soared lately.   

More Gains Ahead?

Currently, GDXJ might continue its strong performance in the near term, with a positive weighted alpha of 54.48 (as per Barchart.com), which gives cues of a further rally.

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