We expect some funds like copper mining ETFs not to be too ruthlessly affected, as long as China – the major importer of the metal – stages a good show. Better economic data is coming out of Eurozone. Moreover, the peak wedding and festive season is just around the corner in India which might give an upward thrust to the demand for gold (read: Gold Mining ETF Investing 101).
Lastly, sooner or later Fed will start tapering its monetary stimulus package, though it is not final yet, so commodities may still have some room to run in this weak dollar environment. And if at all a taper takes place in some time, the imminent volatility can tag metals especially gold, as a safe haven.
Given the current bearish scenario, investors might feel like they have hardly any options in the mining market. But this bearishness can prove to be a good entry point as the space can hold up well in future ruling out the near-term concerns. Hence, mining ETFs might be worth a closer look by some investors who have a high risk tolerance.
This article is brought to you courtesy of Eric Dutram.