3 Gold ETFs Making Big Moves After Syria Strike

Gold shares are getting a lift today, as traders flock to safe-have assets after the U.S. missile strike in Syria

by Karee Venema

Published on Apr 7, 2017 at 10:59 AM
Updated on Jun 24, 2020 at 10:16 AM

Safe-haven assets are trading higher today, as yesterday's U.S. missile strikes on a Syrian airfield spark geopolitical uncertainty. One of the sectors benefiting from the growing fear is gold, with June-dated gold futures up 1.1% at $1,266.50 an ounce. This, in turn, is having a positive effect on the shares of several gold-related exchange-traded funds (ETFs) -- including the VanEck Vectors Gold Miners ETF (GDX), SPDR Gold Trust (GLD), and Direxion Daily Junior Gold Miners Index Bull 3x Shares (JNUG) -- while stoking increased activity in the options pits, as well.

GDX Shares Break Out Above Their 50-Day Trendline

GDX is trading 1.9% higher at $23.94. Since hitting its most recent low of $21.14 in early March, GDX shares are up 13.2%, and have crossed over their 50-day moving average -- a strong "buy" signal, according to data from Schaeffer's Senior Quantitative Analyst Rocky White. Nevertheless, the weekly 4/13 22.50-strike put is seeing notable attention today, and it looks like new positions are being purchased. In other words, GDX options traders expect the VanEck Vectors Gold Miners ETF to retreat back below $22.50 by next Thursday's close, when the weekly series expires.

GLD Options Traders Target Calls

GLD has tacked on 1.1% to trade at $120.47, bringing its year-to-date advance to 9.9%. What's more, the shares appear to have cleared their 200-day moving average -- a trendline that has contained GLD's rally attempts in late February and late March. In SPDR Gold Trust's options pits, volume has swelled to nearly two times what's typically seen at this point in the day, with 74,000 contracts traded. Calls are outpacing puts by a more than 2-to-1 ratio. While speculators seem to be selling to close the in-the-money weekly 4/7 119-strike calls ahead of tonight's expiration, new positions are being initiated at the weekly 4/7 120.50-strike call.

Put Open Interest at Annual High as JNUG Shares Surge

Shares of the JNUG have jumped 5.9% to trade at $7.25. The ETF could certainly use a boost, considering its given back roughly 44% since its mid-February high north of $13. However, today's surge is running out of steam near $7.30, roughly a 61.8% Fibonacci retracement of JNUG's December-to-February rally. Call options are trading at 1.7 times the average intraday pace today, and outpacing puts by a 4-to-1 margin. More broadly, though, January 2018 put strikes make up Direxion Daily Junior Gold Miners Index Bull 3x Shares' top three open interest position, which may explain why put open interest is docked at a 52-week peak -- with 172,841 contracts outstanding.

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