Gold Plummets Yet Another Day: What’s Next?
Precious metals tumble
On Tuesday, June 21, 2016, precious metals fell yet another day. It was the fourth consecutive day of decline for gold. Gold futures for August expiration closed 1.5% lower at $1,272.50 per ounce. Silver and platinum fell 1.1% and 0.58%, respectively.
Palladium, however, rose 0.64%. So far in 2016, palladium has closely followed the overall Market sentiment rather than the returns of its precious metal counterparts. Year-to-date, gold, silver, and platinum have risen 19.2%, 24.2%, and 9.8%, respectively. Palladium has fallen about 2.1% year-to-date.
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Technical readings for the three-month gold chart show a “hanging man,” which is a bearish indicator. The hanging man appeared as gold touched a much lower price during the day on Tuesday, June 21. It closed only marginally below the previous day’s closing price. As the position forms after an advance, a hanging man signals that selling pressure is starting to increase. The low of the long lower shadow confirms that sellers pushed prices lower during the session.
The downward slide in the price of gold also affected the funds that carefully take their price changes from gold. The iShares Gold Trust (IAU) and the SPDR Gold Shares (GLD) both fell about 1.9% on Tuesday.
Which miners fell the most?
Most mining shares also fell on Tuesday. Among the top losers were Harmony Gold Mining (HMY), New Gold (NGD), and Sibanye Gold (SBGL), which fell 7.5%, 5.2%, and 4.9%, respectively. Combined, these three companies make up about 6% of the fluctuations in the VanEck Vectors Gold Miners ETF (GDX).
In the next part, we’ll see how a Brexit (British exit from the European Union) and volatility could control gold.