Investors fretting over global economic uncertainty have helped gold-focused ETFs such as the VanEck GoldMiners ETF (GDX) to their highest inflows in around two years.
Gold Has Prospered
According to new data from LSEG Lipper, funds targeting gold miners drew their first net monthly inflow of cash in six months in March, attracting $555.3 million – the highest level since November 2023.
The VanEck GoldMiners ETF, which invests in gold and silver miners’ stocks, has been one of the beneficiaries helping its share price soar by over 31% in the year to date. Gold mining stocks have also prospered with Barrick Gold’s (GOLD) share price up 24% this year and Newmont Mining (NEM) 29% higher.
The SPDR Gold Shares ETF (GLD), which is exposed to the physical holding of gold bullion, has also flourished up 15% since the turn of the year.
What has driven each of these investments is the surge in the gold price which has zoomed past the magical $3000 level this year.
Safe Haven From Trump
That, in turn, has been driven by the huge global economic uncertainty which has arisen since the return of President Trump to office in January. His tariffs tirade against Canada, Mexico, China and the European Union has weighed on global economic confidence. There is little sign that the picture will get much smoother in the months ahead.
During these times of uncertainty investors traditionally turn to gold as a safe haven and they have done so again. The level of the gold price is also enough to calm any investor fears over higher labor and fuel costs denting gold miner margins.
“In recent years, gold mining companies have faced cost pressures, but are now increasingly able to benefit from higher gold prices. We are adding to them,” Shaniel Ramjee, a multi-asset co-head at Pictet Asset Management, based in London, told Yahoo Finance. “At current gold prices, the profitability returns.”
Is GDX a Good ETF to Buy?
On TipRanks, GDX has a Moderate Buy consensus based on 48 Buy, 9 Hold and 1 Sell rating. GDX stock’s consensus price target is $48.63 implying an 9.29% upside.
