Gaining Leveraged Exposure to Gold

Gold has long been an asset class that investors have turned to during times of economic uncertainty. However, in State Street Global Advisors’ recent Gold ETF Impact Study, the firm reported that “36% of surveyed investors don’t invest in gold because they don’t know enough about the ways that they can invest in gold.”

Investors can gain exposure to gold via ETFs in a number of ways. There are physically backed ETFs that actually hold gold bars, offering direct exposure, or investors can opt for less direct exposure by investing in ETFs that hold gold futures or gold mining equities. By investing in the latter, investors can see more volatility than they would with an investment in physical gold, but the potential for outsized returns relative to the metal also may be greater.

Data from VettaFi’s Explorer platform shows that financial advisors specifically have been increasingly interested in leveraged ETFs in the past six months – more so than all other asset classes. During the same time period, investor interest in gold also increased, along with general economic uncertainty. Gold ranked as the precious metal with the most engagement across all VettaFi platforms.

Direxion offers multiple ETFs that provide leveraged or inverse exposure to the performance of gold mining stocks. In general, investors seeking gold mining stocks are looking less for a store of value and more to exploit the performance of equities influenced by the price of gold. The issuer’s funds offer a way for traders to express – and amplify – their short-term views on the likely direction of the gold industry.

See More: “Gold Exposure a Common Choice in Uncertain Times”