The recent rate cut from the United States Federal Reserve passed by with little fanfare after Chairman Jerome Powell said that this would not be the first of many downward moves. This was interpreted as a “hawkish cut”, but events have transpired over the past week that have shifted this climate.
First were tariffs announced by the Trump administration against China, and the second was the move by the latter to devalue the yuan. Gold surged passed $1,500 on August 7 for the first time since 2013.
The iShares MSCI Global Gold Miners ETF (NYSE:RING) was up 3.3% in late afternoon trading on August 7. The ETF seeks exposure to companies that derive most of their revenues from gold mining, with a focus on diversifying in this global sector.
Shares of the ETF have climbed 42% in 2019 so far.
Some of the top holdings in the ETF include Newmont Goldcorp, the largest gold miner in the world, and Barrick Gold (TSX:ABX), which comes in at a close second.
Some of its biggest Canadian holdings include Kirkland Lake Gold (TSX:KL), Agnico Eagle Mines (TSX:AEM), and Kinross Gold (TSX:K).
These equities have performed extremely well over the course of this bull run, but they have not scratched the surface of the highs posted in the beginning of this decade.
There are troubling signs that the world economy is heading towards recession. Gold ETFs and equities are well worth targeting as central banks move to counteract these headwinds.
