What Are the Current Macro Indicators for Gold and Silver?
Precious metal indicators
The precious metals have a long-term relationship with competing assets like equities, bonds, and other commodities. Over the long run, gold and silver will likely move in the opposite direction as the equities. Recently, gold was taking its cues from crude oil price movement. However, that was only a temporary relationship. The slump in the crude oil market hurt the equities but gave a boost to gold and silver.
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The current rising trend in gold and silver is due to the turmoil in the financial markets, which has led to a safe-haven call and resulted in soaring precious metal prices. Gold and silver have risen 6.2% and 14%, respectively, on a YTD (year-to-date) basis.
The rise in gold and silver has also lifted the gold and silver mining-based funds like the Global X Silver Miners ETF (SIL) and the Sprott Gold Miners ETF (SGDM). These two funds have risen a whopping 50% YTD. The gains in gold and silver are often amplified in the mining sector, which is substantially dependent on metal prices.
Silver outperforms gold
The above chart shows that silver has outperformed gold during the past few weeks. Gold has gained 0.82% on a trailing-30-day basis, and silver has risen 2.3%. Silver’s stronger performance affects the gold-silver ratio, which measures the number of silver ounces it takes to buy an ounce of gold.
The fluctuations in gold and silver also significantly impact the changes in gold and silver mining companies like Silver Wheaton (SLW), Yamana Gold (AUY), and Agnico Eagle Mines (AEM). These three stocks make up 13.8% of the VanEck Vectors Gold Miners ETF (GDX).