Gold’s been pretty ugly lately. The improving US economy and the belief that the Fed will raise rates fairly soon has shattered the gold-bug narrative about hyperinflation, doom, and dollar debasement.
But gold in itself is not the worst gold-related investment you could make.
Gold miners tend to act like leveraged bets on gold, as their fortunes can swing wildly based on future prospects of the yellow metal.
Junior gold miners are even more leveraged and volatile. These are smaller companies, with much more speculative access to resources. You don’t even know really how much they will be able to mine in the future.
And you can go even more leveraged than that, by buying an ETF that moves 3x the direction of the junior gold miners!
We didn’t even know this existed until Pierce Crosby of Stocktwits pointed it out on Twitter.
The ETF is called JNUG or Junior Nuggets (Nuggets itself is the 3x-leveraged regular gold miner ETF).
Anyway, if you want to see a trade that’s been nothing but a gigantic money sink all year, check out this one.
JNUG is down 12% today, and down over 75% from its highs of the year.
When something is going down, and you add 3 layers of leverage (miners —> juniors —> triple price movements) that’s a mega money loser.