NEW YORK (TheStreet) -- Lackluster economic data added a shine to gold stocks. Exchange-traded funds that track the performance of gold or gold miners were among the most discussed assets on StockTwits.com Wednesday after the World Bank cut its global growth forecast to 2.8%.
Gold prices rose to $1,260-an-ounce on the news. Traders bet that central banks around the world would see worse-than-anticipated economic growth as a reason to keep monetary policies lax, thus potentially inflating currencies. Gold is seen by many as inflation hedge since there is only so much of it in the ground that can be mined.
Though gold rose, traders on StockTwits.com focused on the action in gold mining stocks. ETFs that track the performance of gold miners on both the bullish and bearish sides, such as Bull/Bear Junior Gold Miner ETFs (JNUG) and (JDST), Direxion Daily Gold Miners Bear 3x Shares (DUST) and Market Vectors Junior Gold Miners ETF (GDXJ) dominated the StockTwits trending bar.
$GDXJ $JNUG expect the channel to be tested & for it to hold u cant have my shares more upside2 come http://stks.co/j0hoa ? Mike T. (@mikete90) Jun. 11 at 01:16 PM
$GDX $GDXJ $jnug,$NUGT when gold is not moving and miners running hard that means gold is gonna follow them remember last july ? sam (@sbais) Jun. 11 at 12:15 PMSPDR Gold Shares (GLD), an ETF that tracks the price of gold, was also among the most discussed assets Wednesday. It gained early in the morning but slipped into the red by 1:40p.m. Wednesday. Some investors on StockTwits argued that buying gold as inflation hedge is a poor strategy. They maintain that stock values rise more than gold due to inflation and that the specter of inflation actually increases interest in the markets.
$SPY $GLD : If you are selling stocks, because the price of your milk/eggs have 'inflated', you are in fact buying high and selling low. ? Jacob Joseph (@cometkarov) Jun. 6 at 11:14 PMStill, sentiment was majority bullish on ETFs that rise when the price of gold increases. About 57% of the crowd is bullish on SPDR Gold Shares according to StockTwits' analytics. At the time of publication, the author held no positions in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.