Soaring Gold Prices Bullish for JNUG Stock
The prospect of a Donald Trump victory has sent investors fleeing into safe haven assets, sending gold prices and JNUG stock soaring.
Gold prices soared as much as four percent to $1,344.05 per troy ounce overnight as Mr. Trump’s lead widened. As he was declared the winner, gold prices fell and the dollar strengthened.
After the market’s open in Europe, spot gold prices were up 1.98% at $1,300.90 a troy ounce, paring back sharper gains earlier in the morning the reality of a Trump victory began to sink in.
Units up Direxion Daily Junior Gold Miners Index Bull 3X ETF (NYSE:JNUG) stock soared has much as 20% early Wednesday. But as the trading session wore on, JNUG stock began to pare some of its gains. Units were trading up $1.81 to $12.74, up 16.6% from the previous close.
The rush to save haven assets like gold arose from policy uncertainty arising from Donald Trump’s platform. The President-elect’s campaign was driven by a populist appeal, which will likely reduce confidence in U.S. growth initially, and possibly upend global trade and the world economy over the longer term.
Gold miners are the biggest winners from the election fallout. Because of the leverage built into their business’s, even a small change in gold prices can have an outsized impact on profits. Because many producers are operating at the margin, today’s gold price rally could make the difference between inching out a small profit and shutting down operations.
Junior mining shares soared in early trading. B2Gold Corp. (NYSE:BTG) was up $0.19 per share to $2.86 or 7.12%. NovaGold Resources Inc. (USA)(NYSEMKT:NG) was up $0.28 per share to $5.15 or 5.75%. Seabridge Gold, Inc. (USA)(NYSE:SA) soared $0.40 per share to $11.00 or 3.77%.