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Gold prices recently reached the $1,800 level for the first time since 2011. The Direxion Daily Junior Gold Miners Index Bull (NYSE:JNUG) is up 278% since the stock market bottomed on March 23, but that's not the whole story on the JNUG ETF.Source: Shutterstock There are plenty of good reasons to be buying gold, gold stocks and gold ETFs these days. The near-term outlook for gold prices certainly seems bullish. But there are also good reasons to expect the JNUG ETF is headed lower in the medium-term.In addition, the price of gold will likely underperform in the long-term. At this point, gold is a great medium-term trade, but a terrible long-term investment. But the JNUG ETF is too dangerous to hold even in the medium-term.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Gold's Momentum and the JNUG ETFBy no means do I believe that gold prices have peaked at $1,800 per ounce. Gold prices are on the rise in general over concerns of the massive stimulus action the US government has taken this year to support the economy. * 10 Cybersecurity Stocks We Need Now More Than Ever The general idea is that the more money the government prints out of thin air, the less the dollar will be worth. In theory, that thesis certainly makes sense. In reality, the world has decided the U.S. dollar is the benchmark currency.So there isn't necessarily a direct correlation between the total number of dollars and the value of the dollar. The value of the dollar is more dependent on how much investors around the world trust the U.S. dollar.Fortunately, gold investors have a template for how the precious metal reacts to massive stimulus programs. From 2008 to 2012, the US government enacted about $1.8 trillion in fiscal stimulus. So far this year, the government has authorized $3.6 trillion in fiscal economic support. More is likely on the way.The stock market bottomed in early March 2009. However, the price of gold didn't peak until mid-2011. There's no reason to suspect anything different this time around.Investors concerned about the impact of the stimulus and the possibility of more stimulus will likely keep buying gold. Interest rates will remain at near 0% for at least another couple of years. I'd be very surprised if the gold bull market ends here. JNUG ETF Has Major ProblemsDespite my bullish medium-term outlook for gold prices, JNUG is not the play. If JNUG traders don't understand the risks behind holding the fund, they have very short memories. Gold prices may be at their highest levels since 2011. The SPDR Gold Trust (NYSE:GLD) is up 21% year-to-date. But the ETF is still down 82.1% this year.To understand why JNUG is a trash investment, you first have to fully understand what it is. The JNUG ETF is designed to provide 2x-levered exposure to the Market Vectors Junior Gold Miners Index. In other words, it provides leveraged exposure to gold mining stocks, which should perform much better when gold prices rise.Unfortunately, the biggest problem with funds like the JNUG is contango. Since these types of leveraged funds are constantly rolling over their futures contracts, they are constantly losing value. Forward-month contracts are almost always more expensive than current-month contracts. In other words, JNUG is constantly selling lower-priced expiring contracts and buying higher-priced futures contracts to replace them.Contango is the primary reason why the GLD ETF is up 48.9% since the beginning of 2014 and JNUG is down 99% in that same time.The JNUG ETF is designed for day trading, which is essentially gambling unless you are a professional. Buying and holding the JNUG ETF for more than a few days at a time is essentially flushing money down the toilet. Gold Is a Bad InvestmentAs if contango weren't bad enough, gold itself is a historically terrible long-term investment compared to stocks.In the past 10 years, the price of gold is up 36.2% overall. In that same stretch, the S&P 500 is up 201%. Over the past 30 years, the price of gold is up 400% compared to an 801% gain from the S&P 500.Extend that out 100 years, and the S&P 500 is up 40,835% compared to just 8,588% for gold. For over a century, gold has averaged a 4.5% annual gain. In that same stretch, the 30-year rolling average annual return of the S&P 500 has never dropped below 8%. Even if you invested in stocks just before the beginning of the Great Depression, you would have averaged an 8% annual return over the next 30 years.As legendary investor Warren Buffett once said, gold simply can't compete with the stock market: "Gold will never produce anything. Gold has two significant shortcomings, being neither of much use nor procreative … It will remain lifeless forever."Gold is a great long-term hedge against inflation if that's your only concern. But a certificate of deposit will accomplish the same thing with essentially no downside risk. Gold prices will likely continue to head higher in the next couple of years. But gold has always been a terrible long-term investment compared to stocks. And the JNUG ETF is a terrible investment on any timeframe beyond a handful of days.Wayne Duggan has been a U.S. News & World Report Investing contributor since 2016 and is a staff writer at Benzinga, where he has written more than 7,000 articles. Mr. Duggan is the author of the book "Beating Wall Street With Common Sense," which focuses on investing psychology and practical strategies to outperform the stock market. As of this writing, Wayne Duggan does not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Here's What Makes the JNUG ETF a Great Trade but a Terrible Investment appeared first on InvestorPlace.