VanEck Vectors Junior Gold Miners ETF [GDXJ] Stock Forecast

The VanEck Junior Gold Miners ETF is at risk due to the rise in real bond yields, which have had a history of undermining gold mining stock valuations. With the Fed maintaining tight policy and free cash flows already in decline, investors may begin to price in rising default risk in the sector, driving down valuations further. Long term, while I expect a major reversal in monetary policy driving real bond yields back below zero, the GDXJ is a risky way to position for such an outcome.

Gold has long been an asset class that investors have turned to during times of economic uncertainty. However, in State Street Global Advisors' recent Gold ETF Impact Study, the firm reported that “36% of surveyed investors don't invest in gold because they don't know enough about the ways that they can invest in gold.

For most of this year, the financial world has dealt with high levels of uncertainty. This has come from several different areas, including inflation.

The rationale for investing in natural resource equities and commodities has stayed consistent: to enhance portfolio diversification, access global growth and hedge against inflation. The sharp economic recovery from the depths of the pandemic coupled with continually evolving expectations in terms of future impact have recast the spotlight on natural resources and commodities.

Gold prices have remained flat in the last two months despite a weaker US dollar. The GDXJ ETF, which tracks small-cap companies involved in gold and silver mining, has underperformed the S&P 500 over the last three months. Despite a high valuation and weak seasonal trends, the ETF has potential for growth if it can rally above the $42 level.

Hello! This is markets reporter Isabel Wang bringing you this week's ETF Wrap. In this week's edition, we take a look at small-cap ETFs, which attracted significant inflows in the past week as small-cap stocks have rebounded after being left behind by the megacap technology shares which soared in 2023.

These gold ETFs provide investors with numerous ways to play the metal, from direct exposure to stock-related angles, on the cheap.

Gold mining stocks have been pummeled lately. We look at why and why we are bullish on gold miners right now.

While the VanEck Vectors Junior Gold Miners ETF would likely outperform if gold prices manage to push higher, the risk-reward outlook is extremely poor here. Despite the recent rise in gold prices, junior gold miners have been unable to grow their sales and earnings, while free cash flows remain negative.

The Precious Metals R&S Index grew by 3.11% in April. The Precious Metals R&S Equally Weighted Index grew by 1.85%.

VanEck Vectors Junior Gold Miners ETF is a US stock and trading under the symbol GDXJ

VanEck Vectors Junior Gold Miners ETF stock price is $32.25 today.

Yes, VanEck Vectors Junior Gold Miners ETF is a publicly traded company.