Key insights
- The author presents a bullish case for GDXU, a leveraged gold miner ETN, arguing that gold prices remain elevated and many miners are profitable. Despite the risks associated with leveraged products, the author believes GDXU could see significant upside if the gold mining sector experiences renewed momentum. This sentiment suggests a potential contrarian indicator for the gold mining sector, which has lagged gold prices.
Gold just spent the last year ripping higher while miners have been getting tossed around. GDXU has pulled back massively from its highs in the mid 500s and is currently trading in the mid 150s. sentiment feels way less euphoric than it did a few months ago.
My bull case:
- Gold is still trading near historically elevated levels. • Many miners are printing cash at these gold prices. • If gold simply stays high (not even mooning), miners could eventually catch up. • Leveraged miner products like GDXU can move violently when the sector gets momentum.
Yes, I know GDXU is a 3x leveraged ETN and not something you marry. Daily reset, volatility decay, all that fun stuff. But if gold miners are setting up for another leg higher, this thing could move fast.
What am I missing?