This leveraged gold bear has risen 10% in the past three months
gold is a far cry from the rise he saw at the height of the pandemic in 2020, which helped reverse ETFs like the Direxion Daily Gold Miners Index Bear 2X Shares (DUST) 10% rally in recent months.
September was a volatile month for stocks, which should have translated into a strong month for gold. However, this was clearly not the case, as the precious metal continues to languish and stay below the $ 1,800 price point.
“September is considered, from a historical point of view, one of the best months for gold”, wrote Arkadiusz siero?? of Sunshine Profits, the price of gold alone fell 4%. “Well, September 2021 was definitely not very good for the yellow metal. “
Rising bond yields worried investors for much of September, which should have prompted a turn to gold amid the volatility. Instead, bearish traders at DUST were able to scalp some gains.
DUST seeks daily investment results (before fees and expenses) of 200% of the inverse of the daily performance of the NYSE Arca Gold Miners Index. The ETF invests in swap agreements, futures, short positions or other financial instruments which, combined, provide a leveraged inverse or short exposure to the index equal to at least 80% of the net assets of the fund.
âIn fact, the whole of the third quarter was rather disappointing for the yellow metal, which has lost 1.15% in the last three months,â said Siero. âHowever, it was still much better than the disastrous first quarter of the year in which gold had plunged more than 10%. So far, the yellow metal is down 7.67% since beginning of the year.”
More decline until 2021
The ICE US Dollar Index is up 4% so far this year, contributing to the fall in gold in 2021. The Federal Reserve is looking to reduce its stimulus measures, which could put downward pressure on gold, but stagflation could work in its favor in 2022.
âWell, the recent rise in gold prices is pretty encouraging,â said Siero. âHowever, that doesn’t change the bearish outlook for gold for the fourth quarter of 2021. Gold hasn’t been able to break above $ 1,800, and it looks like it wants to keep falling. , any new hawkish comment from the Fed could push gold prices up even lower. “
“Having said that, I am more optimistic for gold in 2022,” added Siero. âOne of the reasons is that over time the narrative of transitory inflation will seem less and less convincing. Meanwhile, the chances of an inflationary crisis, or stagflation, should be higher and higher. “For more news, information and strategy, visit the website Leveraged and reverse channel.
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