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Gold-linked ETF could benefit if Fed tone softens on hikes

The Direxion Daily Gold Bull 2X ETF aims to deliver 200% of the daily performance of the SPDR Gold Trust (GLD), according to ETF Trends.

Reported · Written up by our desk · ETFs

ETF Trends highlights that gold’s near-term outlook is closely tied to Federal Reserve expectations because the metal does not pay dividends or interest, which can make it less attractive when bond yields are elevated.

The outlet says market observers believe gold and gold-related ETFs could benefit if the central bank softens its tone on additional rate hikes before the end of the year.

ETF Trends points to the Direxion Daily Gold Bull 2X ETF (UGLD), which debuted in May and seeks 200% of the daily performance of the SPDR Gold Trust (GLD), an ETF backed by physical gold holdings.

ETF Trends also notes that UGLD is not positioned as a buy-and-hold product, and it cites a managing director at The Gold Bullion Company saying gold could see more near-term volatility tied to Fed developments.

Latest closeGold $4,147.50 ▼4.0%

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