Gold prices surged on Tuesday as tensions escalated in the Middle East, with Iran deploying drones and missiles towards Israel. This move raised concerns of a regional conflict that could impact the global economy. Spot gold rose above 0.5%, nearing its all-time high of $2,431.78 set in April. This increase also boosted the gold mining sector, with Direxion Daily Gold Miners Index Bull 2X Shares (NUGT) rebounding from a previous low.
NUGT, a double-leveraged fund designed to outperform the NYSE Arca Gold Miners Index by 200%, includes top holdings like Newmont Corp (NEM) and Barrick Gold Corp (GOLD). However, leveraged ETFs like NUGT are considered risky for long-term investors and should be used cautiously. For traders looking to bet against the gold mining sector, Direxion also offers a bearish ETF, Direxion Daily Gold Miners Index Bear 2X Shares (DUST).
On the technical side, NUGT recently saw a decline after reaching an 11-month high in April. Tuesday’s trading session showed signs of a potential reversal, with a dragonfly doji candlestick pattern suggesting a bottom may have been reached. Bulls are now eyeing a move above the eight-day exponential moving average, while bears are looking for a rejection at that level to confirm a new downtrend.
With resistance at $37.68 and $41.31 and support at $33 and $28.13, traders will be closely monitoring NUGT’s price action in the coming days for further direction.
