By Aparna Narayanan
Mining stock exchange traded funds cooled like a newly cast gold ingot dropped into a bath of fresh cold water until Friday's jobs report set them sizzling again.
"Gold historically has a big rally going into the final quarter," benefiting in part from the Indian wedding season as well as general holiday buying, said Frank Holmes, portfolio manager at U.S. Global Funds. "And negative interest rates globally are a very strong support mechanism for the price of gold."
Gold unexpectedly soared 25% in the first half of 2016 after three troubled years, gaining amid volatile stock markets and a shaky global outlook. The precious metal saw red-hot global demand in this period — 2,335 tons, the second-highest on record, with investment demand surpassing levels during the 2009 financial crisis.
On Friday, the flagship SPDR Gold Shares (GLD) rallied for a second day, reversing from a recent pullback, after underwhelming jobs data was seen to put the Fed's plan to raise rates on hold. The $39.69 billion GLD ETF has found support at the $125 level and could be poised to climb again. Gold mining stocks, a spring-loaded play on the price of gold, also rallied on the news.
VanEck Vectors Gold Miners (GDX) and VanEck Vectors Junior Gold Miners (GDXJ) are among the best-performing ETFs of 2016 and have seen net inflow of more than $3 billion combined.