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Direxion Shares Exchange Traded Fund Trust (NUGT) Soar Stalled by Dollar Demand

Direxion Shares Exchange Traded Fund Trust (NYSEARCA:NUGT) falls

Direxion Shares Exchange Traded Fund Trust had its recent rise in value stalled on Friday as Wall Street, and the world, bought back into the dollar on fears that the Federal Reserve would seek to raise interest rates at its next open market meeting. The gold shares ETF has rocketed in value so far in October, but that rise appears to have been stalled on Friday.

Direxion Shares Exchange Traded Fund Trust (NYSEARCA:NUGT) falls

There are doubts about what the Federal Reserve will do with interest rates before the end of the year, but it seems that the dollar isn’t going to shift in any major way until a decision is made. On Friday morning the price of the

Watch the Fed for gold moves

Those watching gold markets are, as they likely should be, obsessed with watching the Federal Reserve. The central bank kept interest rates the same, at all time lows, in September, but Janet Yellen, who heads up the body, says she still expects a hike to come later on this year. Other member’s of the bank’s board, who will ultimately decide on the rate hike, have been vocal about their outlook.

On Monday last Governor Lael Brainard, a member of the board, said that a more cautious stance on a rate hike was likely the best path forward. Governor Daniel Tarullo also chimed in, disagreeing with Yellen, and saying that rates were likely to stay at current lows through the end of the year.

With a Fed FOMC meeting coming up on October 27, trading on all markets is likely to get more volatile. With members of the central bank’s board feeling quite comfortable to air differing views in the public sphere, it may be worse this time around than heading into past meetings.

Direxion Shares Exchange Traded Fund Trust gets torrid

The Direxion Shares Exchange Traded Fund Trust , has been one of the best bets in the wake of the Fed’s decision to keep rates the same through September, but it’s not clear how far the ETF can rise given the way the market is turning right now.

Societe Generale analyst Robin Bhartold Reuters on Friday that “We had slightly better U.S. data which saw the dollar rally, so that seems to have scared off some of the gold buyers for the moment.” He reckons it’s not all bad for gold, however, “Some of the tailwinds are back in gold, in the sense of softer U.S. data, (and) the fact that a Fed rate hike is most unlikely this year.”

At time of writing shares in Direxion Shares Exchange Traded Fund Trust , were selling for $50.56. That’s a loss of 1.4 percent on Thursday’s closing price. In the last month the price of the ETF as risen by more than 60 percent.

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