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Mining ETF to target as gold prices rise

Commentaries & Views

Commodity prices have turned red-hot since Russia's invasion of Ukraine, as investors turn to safe-haven assets while supply concerns linger. One name that's experienced an exceptional rise on the charts recently is gold mining exchange traded fund (ETF) SPDR Gold Shares (GLD), which yesterday came within a hair's breadth of its Aug. 6, 2020 all-time high of $194.45. Unsurprisingly, this lines up with gold's surge toward its own August 2020 all-time high, with gold prices just yesterday rising above the key $2,000 level.

Though GLD was last seen down 2.4% to trade at $186.92, and falling just below the +10% year-to-day breakeven level, the security boasts a 16.2% year-over year lead. February also saw SPDR Gold Shares stock nab its best month since May 2021, adding 6.1% as it was guided higher by the short-term 10-day moving average.

GLD Chart March 9

Call traders have ramped up their positions on the stock, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day call/put volume ratio of 4.80, which stands higher than all other readings from the past year. This implies a healthier-than-usual appetite for calls of late.

Short interest has also risen along with the stock. In fact, short interest added 47.2% in the most recent reporting period, and makes up 3.4% of the stock's available float.

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