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Inverse Leveraged Gold ETF (GLL) Hits a New 52-Week Low

Zacks Equity Research
Updated
Is (LXFR) Outperforming Other Industrial Products Stocks This Year?

Investors looking at avoiding underperformance should steer clear of ProShares UltraShort Gold GLL. The fund recently hit a new 52-week low. Shares of GLL are down roughly 31.4% from its 52-week high of $95.07/share.


But is more pain in store for this ETF? Let’s take a quick look at the fund and the near-term outlook to get a better idea of where it might be headed.


GLL in Focus


GLL focuses on providing 2x daily short exposure to the gold bullion. It charges 95 basis points in fees per year and has AUM of $37.92 million (see all Leveraged Commodity ETFs here).


Why the Move?


North Korea conducted its sixth nuclear test, that of a hydrogen bomb, which can be mounted on an Inter Continental Ballistic Missile, on September 3, 2017. Not only did it trigger an artificial earthquake of magnitude 6.3 but also rattled the markets, with Asian stocks falling while safe haven investments like yen and gold surging.

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Only a few days ago North Korea had launched a missile that flew over the Japanese airspace. U.S. President Donald Trump has been continuously suggesting that Kim Jong-Un’s threats will be met with military actions if he threatens to harm the U.S. territories or any of its allies. The increasing tensions relating to this potential war has driven up the prices of safe haven gold.


More Losses Ahead?


With geopolitical risks continuously rising, we believe it is best to avoid this ETF, as safe haven demand is rising. The fund has a weighted alpha of -13.86. So, the outlook for this fund remains quite bleak.


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PRO-ULS GOLD (GLL): ETF Research Reports
 
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Zacks Investment Research
 
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