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Direxion Shares Exchange Traded Fund Trust (NUGT) Open with Gains as Analysts Bills Gold To Reach $10,000 an Ounce

Direxion Shares Exchange Traded Fund Trust (NUGT) Gold

Direxion Shares Exchange Traded Fund Trust is starting the new week on a strong note in line with the gains being recorded in gold trades this morning. As at 10:09AM EST, the ETF was up 2.05% to $108.50 to mark gains straight out of the gate. Gold investors should have reasons to smile today because the rally in the yellow metal seems to have returned with renewed vigor. The yellow metal is back to bullish ways because bulls have found their voice after U.S. Labor data showed weaker than expected results.

Direxion Shares Exchange Traded Fund Trust (NUGT) Gold

Gold returns to bullish ways after 2-week hiatus

The yellow metal has found strength today because investors are bracing up in response to the nervousness and volatility in the financial markets ahead of the Brexit referendum. Analysts at CitBank have noted that “gold has fluctuated in line with the Brexit opinion polls, even dislocating it from its usual primary-link with the U.S. dollar.” Britain is set to go to the polls to vote on whether to “Brexit” exit or “Bremian” remain in the EU. A Brexit could have far-reaching effects that could destabilize the Euro zone and the global markets.

The talks of a Brexit have also shaken the foundation of unity in the EU and other countries might chose to hold referendums to leave the EU even if Britain votes to remain in the EU. Interestingly stocks in the U.S., Asia, and Europe have started to suffer ahead of the Brexit polls set for June 23. The S&P 500 is down 0.06%, FTSE 100 is down 0.88%, EURO STOXX 50 is down 1.54%, and China’s Shanghai is down 3.21%.

Danske Bank analyst Jens Pedersen notes that “following the labor market report a Fed rate hike has been priced out for June and July, and at the same time it seems as if odds for the UK to leave the European Union have come back up again… Those two factors are benefiting gold.”

As expected, gold and the Direxion Shares Exchange Traded Fund Trust are recording gains in response to the weakness in equities today. Spot gold was up 0.9% to $1,283.76 an ounce. Gold for August delivery was trading up 0.9% to $1,286.90 an ounce to continue the three-week high that it recorded last week. If the yellow metal were to close with current gains today, it would mark the highest closing price since May 17 when the bullion closed at $1,283.50 an ounce.

Gold could reach $10,000 per ounce by 2018

Gold bulls are becoming more vocal and there is an uptrend in the Direxion Shares Exchange Traded Fund Trust . Jim Rickards author of multiple New York Times bestsellers and a celebrated commodities expert on Wall Street seems to think that the yellow metal is in a for a bullish ride that could climax at $10,000 an ounce by 2018. Rickards believes that the stage is set for a tragic financial meltdown that will make the bullion shine brighter in the years ahead.

Rickards noted that “We should expect the next global financial panic soon… We have imploded twice in the last 16 years so get ready for the third one.” Rickards noted that the financial markets have consistently had disasters every 10 years – the 2008 meltdown and the 1998 fiasco of Long-Term Capital Management comes to mind. Rickards noted that “In 2018, who’s going to bail out the Central Banks?”… The bailout money is going to come from the IMF [International Monetary Fund] as they have the only clean balance sheet left.”

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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