For investors seeking momentum, iShares MSCI Global Gold Miners ETF RING is probably on the radar. The fund just hit a 52-week high and is up 83.01% from its 52-week low price of $27.70/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:
RING in Focus
The MSCI ACWI Select Gold Miners Investable Market Index measures the equity performance of comps in both developed & emerging markets that derive the majority of their revenues from gold mining. The product charges 39 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. The strong likelihood that the Fed might start cutting interest rates in the near term is driving the upside in gold prices.
Gold prices are inversely related to the value of the greenback as gold is priced in dollars. If the Fed goes ahead with a rate cut it will result in the value of the dollar to depreciate. A weaker U.S. dollar generally leads to higher demand for gold.
Considered a safe-haven investment, prevailing geopolitical tensions and economic uncertainties further support the price of 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, RING might continue its strong performance in the near term, with a positive weighted alpha of 65.57 (as per Barchart.com), which gives cues of a further rally.
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iShares MSCI Global Gold Miners ETF (RING): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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