Make Big Bets on Gold With These 3 Leveraged Mining Funds
The world's favorite precious metal reasserted its worth as a safe haven asset as markets tumbled in the first few days of April. As of April 4, 2025, the price of gold is up an impressive 30% in the past year and 14.5% year-to-date (YTD).
Meanwhile, as the S&P 500 plunged by 8.2% the week of March 31, 2025—due largely to the announcement of sweeping tariffs on imports from dozens of nations—the spot price of gold dropped by only 2.6% at the same time.
Increased day-to-day market turbulence and growing calls for a potential recession may prompt investors to exercise caution, and one way to do this is to rebalance portfolios toward defensive plays like gold.
And some investors might see an opportunity to make a bolder bet on the precious metal: a leveraged exchange-traded fund (ETF) or note (ETN). These investments can amplify gains but also have the potential to magnify losses for an overall high-risk, high-reward bet.
Three such exchange-traded products may appeal to investors seeking to capitalize on gold's rally indirectly —through the share prices of gold mining stocks, which tend to correlate movement with the price of the metal itself: GDXU,
GDXU: Broad, Triple-Leveraged Exposure to Gold Miners
[content-module:CompanyOverview|NYSEARCA:GDXU]
If you're looking for a single leveraged product that offers exposure to both large and mid-cap gold miners, consider the MicroSectors Gold Miners 3X Leveraged ETN (NYSEARCA: GDXU).
GDXU is an ETN —a debt instrument issued by Bank of Montreal. This means it doesn't hold physical assets but instead promises to pay returns based on its index. ETNs carry issuer credit risk, so investors are also exposed to the solvency of the issuing bank.
This ETN takes a unique approach to gold mining stocks by tracking the performance of the S-Network MicroSectors Gold Miners Index—which is itself composed of two major gold mining ETFs:
VanEck Gold Miners ETF (NYSEARCA: GDX): GDX focuses on large-cap miners and has a concentrated portfolio where top holdings can represent over 10% each.
VanEck Junior Gold Miners ETF (NYSEARCA: GDXJ): GDXJ targets smaller-cap mining firms but includes a few larger players and some that focus on metals other than gold. Its asset distribution is more balanced, with top holdings closer to 7%.
Between these two funds, GDXU provides investors with broad exposure to gold mining companies at multiple places on the market capitalization spectrum. GDXU tends to be more heavily weighted toward GDX, which is made up of larger firms.
GDXU provides 3x leverage, reset daily. This means daily gains in GDX and GDXJ are tripled, although investors must be cautious not to remain exposed to GDXU for a longer period, lest they risk diverging from the fund's intended results.
This makes GDXU a great choice for investors keen to amplify short-term spikes in the share price of gold mining firms. Its expense ratio of 0.95% is on the low side for 3x leveraged funds, an added bonus.
NUGT: A Concentrated, Double-Leveraged Bet on Top Miners
[content-module:CompanyOverview|NYSEARCA:NUGT]
The Direxion Daily Gold Miners Index Bull 2X Shares (NYSEARCA: NUGT) ETF tracks the NYSE Arca Gold Miners Index, which is the same index that GDX targets. This index is fairly concentrated in a handful of names, with the largest positions routinely occupying at least 10% of the portfolio.
This makes NUGT a targeted leverage play on some of the top names in the gold mining space.
NUGT is an ETF, meaning it actually holds the underlying assets—in this case, derivatives tied to gold mining stocks. This reduces credit risk and enhances transparency as ETFs don't rely on the solvency of an issuer the way an ETN does.
With an expense ratio of 1.13%, NUGT is not an inexpensive fund. Its 2x leverage also resets daily, making it ideal for short-term plays. Indeed, investors wishing for long-term exposure to the index may be better off trading in GDX shares directly—the expense ratio is significantly lower, and results won't be skewed due to compounding returns.
Still, for individual days in which the gold mining industry thrives, NUGT is a great choice to maximize gains.
JNUG: Aggressive Exposure to Junior Gold Miners
[content-module:CompanyOverview|NYSEARCA:JNUG]
For traders seeking high volatility and outsized returns from smaller mining companies, look to the Direxion Daily Junior Gold Miners Index Bull 2X Shares (NYSEARCA: JNUG).
JNUG offers 2x daily leveraged exposure to the GDXJ, making it a powerful tool for those looking to capitalize on sharp short-term movements in the junior mining space.
But keep in mind the risk level is high with this ETF. When you combine small-cap volatility with leverage, it can lead to large swings. That makes JNUG best suited for active traders who can monitor their positions closely rather than long-term buy-and-hold investors.
Because GDXJ includes a wider range of companies—some not exclusively focused on gold—JNUG also gives indirect exposure to the broader mining sector. This can occasionally soften or skew its correlation to the price of gold, especially in the short term.
With that in mind, JNUG may appeal most to traders who are not only bullish on gold but who also expect junior miners to outperform their larger peers during surges in the precious metals market.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Global News
an hour ago
- Global News
Credit rating agency says Manitoba's recent tax changes outweigh affordability offers
The Manitoba government is expected to use more 'revenue levers,' similar to its recent income and property tax changes, as part of its plan to reduce the deficit, a credit-rating agency report says. S&P Global Ratings has affirmed the Manitoba government's existing short-term and long-term credit ratings and says the outlook for the province is stable, based in part on expected revenue changes and spending control. 'The stable outlook reflects our expectation that, despite economic growth and trade uncertainty, Manitoba will deploy revenue levers and expenditure management to generate stronger fiscal outcomes in the next two years,' the report, issued May 26, said. The NDP government, elected in 2023, has promised to reduce costs for Manitobans. It has taken out advertising to promote its cut to the provincial fuel tax, an increase to a tax credit for renters and other measures. Story continues below advertisement But the money forgone by the province for those measures is outweighed by recent tax changes that are boosting provincial revenues, a director with S&P said. That includes a change in this year's budget that will no longer see income tax brackets automatically rise in line with inflation. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy 'That alone is enough to offset all the affordability measures that they're putting in,' Bhavini Patel, director in S&P's Canadian international public finance group, said in an interview. The NDP government has promised to balance the budget before the next election, slated for 2027. That would end a string of annual deficits that stretches back almost continuously to 2009, with the exception of two surpluses. Part of the province's revenue growth has come from recent changes that will see many property owners and income-earners pay more. In last year's budget, the government changed the way education tax credits on property are calculated. The government estimated the change would net the province an extra $148 million a year, although that number is likely to grow due to recent increases in property assessments and taxes levied by school divisions. In this year's budget, the government stopped indexing income tax brackets and the basic personal exemption to inflation. By keeping the brackets and exemption constant as wages increase, unlike most provinces, the government is forecasting an extra $82 million in revenue. Story continues below advertisement Finance Minister Adrien Sala said he's not looking at future tax changes aimed at garnering more money, and is expecting an economic boost to increase revenue. 'I think the biggest driver of new revenues will be economic growth,' he said in an interview. He pointed to the recent start of construction of the Alamos gold mine near Lynn Lake as an example. The government is also looking at keeping annual spending growth in check in order to balance the budget, he said.
Winnipeg Free Press
4 hours ago
- Winnipeg Free Press
Credit rating agency says Manitoba's recent tax changes outweigh affordability offers
WINNIPEG – The Manitoba government is expected to use more 'revenue levers,' similar to its recent income and property tax changes, as part of its plan to reduce the deficit, a credit-rating agency report says. S&P Global Ratings has affirmed the Manitoba government's existing short-term and long-term credit ratings and says the outlook for the province is stable, based in part on expected revenue changes and spending control. 'The stable outlook reflects our expectation that, despite economic growth and trade uncertainty, Manitoba will deploy revenue levers and expenditure management to generate stronger fiscal outcomes in the next two years,' the report, issued May 26, said. The NDP government, elected in 2023, has promised to reduce costs for Manitobans. It has taken out advertising to promote its cut to the provincial fuel tax, an increase to a tax credit for renters and other measures. But the money forgone by the province for those measures is outweighed by recent tax changes that are boosting provincial revenues, a director with S&P said. That includes a change in this year's budget that will no longer see income tax brackets automatically rise in line with inflation. 'That alone is enough to offset all the affordability measures that they're putting in,' Bhavini Patel, director in S&P's Canadian international public finance group, said in an interview. The NDP government has promised to balance the budget before the next election, slated for 2027. That would end a string of annual deficits that stretches back almost continuously to 2009, with the exception of two surpluses. Part of the province's revenue growth has come from recent changes that will see many property owners and income-earners pay more. In last year's budget, the government changed the way education tax credits on property are calculated. The government estimated the change would net the province an extra $148 million a year, although that number is likely to grow due to recent increases in property assessments and taxes levied by school divisions. Monday Mornings The latest local business news and a lookahead to the coming week. In this year's budget, the government stopped indexing income tax brackets and the basic personal exemption to inflation. By keeping the brackets and exemption constant as wages increase, unlike most provinces, the government is forecasting an extra $82 million in revenue. Finance Minister Adrien Sala said he's not looking at future tax changes aimed at garnering more money, and is expecting an economic boost to increase revenue. 'I think the biggest driver of new revenues will be economic growth,' he said in an interview. He pointed to the recent start of construction of the Alamos gold mine near Lynn Lake as an example. The government is also looking at keeping annual spending growth in check in order to balance the budget, he said. This report by The Canadian Press was first published June 10, 2025.
CTV News
4 hours ago
- CTV News
Stocks drift as Wall Street waits to hear what U.S.-China trade talks will bear
Trader Jonathan Mueller works on the floor of the New York Stock Exchange, Thursday, June 5, 2025. (AP Photo/Richard Drew) NEW YORK — U.S. stocks are drifting just below their all-time high on Tuesday as the wait continues to hear what will come of trade talks underway between the United States and China. The S&P 500 was 0.3% higher in afternoon trading as talks between the world's two largest economies carried into a second day. The Dow Jones Industrial Average was up 73 points, or 0.2%, as of 1:54 p.m. Eastern time, and the Nasdaq composite was 0.3% higher. Stocks have roared higher since dropping roughly 20% below their record two months ago, when President Donald Trump shocked financial markets with his announcement of stiff, wide-ranging tariffs. Much of the rally was due to hopes that Trump would lower his tariffs after reaching trade deals with countries around the world, and the S&P 500 is back within 2% of its all-time high, which was set in February. It's getting to be time to see whether such hopes were warranted. The talks with China, which are likely covering a range of disagreements between the two countries, were 'going well,' U.S. Commerce Secretary Howard Lutnick said as he arrived Tuesday morning. He expected them to continue all day in London. Both the United States and China have put many of their tariffs announced against each other on pause as talks continue. Even though many tariffs are on hold for the moment, they're still affecting companies and their ability to make profits because of all the uncertainty they've created. Designer Brands, the company behind the DSW shoe store chain, became the latest U.S. company to yank its financial forecasts for 2025 because of 'uncertainty stemming primarily from global trade policies.' The company, which also owns the Keds, Jessica Simpson and other shoe brands, reported a larger loss for the start of the year than analysts were expecting, and its revenue also fell short of forecasts. CEO Doug Howe pointed to 'persistent instability and pressure on consumer discretionary' spending, and the company's stock tumbled 21.2%. The uncertainty is moving in both directions, to be sure. A survey released Tuesday of optimism among small U.S. businesses improved a bit in May. 'While the economy will continue to stumble along until the major sources of uncertainty are resolved, owners reported more positive expectations on business conditions and sales growth,' according to Bill Dunkelberg, chief economist at the National Federation of Independent Business. On Wall Street, J.M. Smucker fell 14.8% even though its results for the latest quarter topped analysts' expectations. Its revenue fell short of expectations, as did its forecast for profit in the upcoming year. Tesla helped to offset such losses after rising 4%. The electric vehicle company has been recovering a bit since tumbling last week as Elon Musk's relationship with Trump imploded. That raised fear about possible retaliation by the U.S. government against Tesla. Shares that trade in the United States of chipmaking giant Taiwan Semiconductor Manufacturing Co. rose 2.4% after the company known as TSMC said its revenue in May jumped nearly 40% from the year earlier. Casey's General Stores leaped 11.6% after the chain of convenience stores based in Ankeny, Iowa, reported a stronger profit for the latest quarter than analysts expected. It credited strength in sales of hot sandwiches and other items. In stock markets abroad, indexes were mixed amid mostly modest movements across Europe and Asia. A 0.8% drop for Germany's DAX and a 06% gain for South Korea's Kospi were some of the bigger moves. In the bond market, the yield on the 10-year Treasury eased to 4.47% from 4.49% late Monday. ___ AP business writers Matt Ott and Elaine Kurtenbach contributed. By Stan Choe
