For investors seeking momentum, Sprott Gold Miners ETF SGDM is probably on the radar. The fund just hit a 52-week high and is up 121.09% from its 52-week low price of $26.60/share.
But are there 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:
SGDM in Focus
The underlying Solactive Gold Miners Custom Factors Index aims to track the performance of larger-sized gold companies whose stocks are listed on Canadian and major U.S. exchanges. The product charges 50 bps in annual fees (See: All Materials ETFs).
Why the Move?
Gold has been an area to watch lately, given the persistent geopolitical frictions and increased safe-haven demand. The Fed’s first rate cut this year and the likelihood of further rate cuts later in the year also bode well. The greenback's value tends to move inversely with interest rate adjustments by the Fed. Interest rate cuts by the Fed make the dollar less attractive to foreign investors, as this weakens the U.S. dollar.
More Gains Ahead?
SGDM might continue its strong performance in the near term, with a positive weighted alpha of 104.17 (as per Barchart.com), which gives cues of a further rally.
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Sprott Gold Miners ETF (SGDM): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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