Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.

The Federal Reserve is facing pressure from President Trump to cut interest rates, but concerns about inflation* due to tariffs are causing hesitation. However, recent economic data suggests conditions that could favor rate cuts, potentially creating opportunities for gold mining stocks.

Could a “Goldilocks” Scenario Boost Gold Mining Stocks?

Despite a weak gross domestic product (GDP)* reading in Q1, the initial readings of Q2’s GDP have been encouraging in terms of avoiding a recession. Inflation data remains soft, with the most recent June reports showing a continued containment of price increases. The labor market is also showing signs of softening, partially due to artificial intelligence.

Traditionally, a softer labor market, combined with low inflation, paves the way for rate cuts, possibly as early as September if data remains weak. The Federal Reserve last cut rates in December 2024.

Lower interest rates also typically reduces the opportunity cost of holding gold, boosting its price and, in turn, gold mining stocks, which can potentially benefit from higher revenue and earnings. In this situation, Direxion’s Daily Gold Miners Index Bull 2X Shares (Ticker: NUGT) could see a strong bid. This fund seeks daily investment results, before fees and expenses, of 200% of the performance in the NYSE Arca Gold Miners Index*.

Below is a daily chart of NUGT as of July 17, 2025.

Source: TradingView.com

Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate. An investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance quoted. For the most recent month-end performance go to Direxion.com/etfs. For standardized performance click here.

Economic Surprises and Earnings

Gold mining stocks could face bearish pressure due to several macroeconomic and market-specific factors. If the Federal Reserve maintains or raises interest rates to combat persistent inflation, the opportunity cost of holding non-yielding assets like gold increases, potentially driving down gold prices. Higher interest rates strengthen the U.S. dollar, which typically has an inverse relationship with gold, further depressing its value and, by extension, the profitability of gold mining companies.

Plus, we are going right into earnings season, where disappointments could send mining stocks lower. Traders seeking to attempt to protect themselves from a disappointing earnings season for metal miners may find a trade with Direxion’s Daily Gold Miners Index Bear 2X Shares (Ticker: DUST), which seeks daily investment results, before fees and expenses, of 200% of the inverse performance of the NYSE Arca Gold Miners Index.

The fund’s top holdings include Newmont Corporation (Ticker: NEM), Agnico Eagle Mines (Ticker: AEM), and Wheaton Precious Metals (Ticker: WPM). Newmont reports their earnings on July 25, Agnico on July 30, and Wheaton Precious Metals on August 7. Any notable earnings misses or poor guidance could send these names lower, and the mining sector with it. Note that these funds track a commodity related equity index, consisting of a basket of gold miner related stocks. They do not invest in physical commodities and should not be expected to directly track the price performance of gold.

To see the Funds' complete holdings, please click here. Holdings are subject to risk and change.

Below is a daily chart of DUST as of July 17, 2025.

Source: TradingView.com

Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate. An investor’s shares, when redeemed, may be worth more or less than their original cost; current performance may be lower or higher than the performance quoted. For the most recent month-end performance go to Direxion.com/etfs. For standardized performance click here.

*Definitions and Index Descriptions

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

Leveraged and Inverse ETFs pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk and who actively manage their investments.

The NYSE Arca Gold Miners Index (GDMNTR) is a modified market capitalization weighted index comprised of publicly traded companies that operate globally in both developed and emerging markets, and the index provider defines as involved primarily in mining for gold and, to a lesser extent, in mining for silver. The Index will limit the weight of companies whose revenues are more significantly exposed to silver mining to less than 20% of the Index at each rebalance date. The Index may include small- and mid-capitalization companies and foreign issuers. One cannot directly invest in an index. The Funds do not invest directly in or directly short gold or gold futures contracts.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. A Fund is non-diversified and includes risks associated with the Fund’s concentrating its investments in a particular industry, sector, or geography which can increase volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause prices to fluctuate over time.

Leverage Risk – Each Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation or inverse correlation with the Index and may increase the volatility of the Fund.

Daily Index Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with the Index and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to the Index is impacted by the Index’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to the Index at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to the Index increases on days when the Index is volatile near the close of the trading day.

Daily Inverse Index Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with the Index and therefore achieve its daily inverse leveraged investment objective. The Bear Fund’s exposure to the Index is impacted by the Index’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to the Index at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to the Index increases on days when the Index is volatile near the close of the trading day.

Gold and Silver Mining Company Risk – Gold and silver mining companies are highly dependent on the price of gold and silver bullion, respectively, and may be adversely affected by a variety of worldwide economic, financial and political factors.

Mining and Metal Industry Risk – Mining and metal companies can be significantly affected by international political and economic developments, energy conservation, the success of exploration projects, commodity prices, taxes and government regulations.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Market Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Other Investment Companies (including ETFs Risk), Cash Transaction Risk, Passive Investment and Index Performance Risk and for the Direxion Daily Gold Miners Index Bear 2X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

ALPS Distributors, Inc.