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How the US Dollar Impacted Precious Metals in January 2017

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Part 2
How the US Dollar Impacted Precious Metals in January 2017 PART 2 OF 5

How Economic Numbers Have Been Influencing Gold

Economic numbers

Since Donald Trump’s new administration is planning to provide an impetus to the economy, the haven bid for gold has fallen. US gold futures for April expiration fell almost 0.20% and closed at $1,187 per ounce. That’s the lowest level for gold since late December 2016.

New home sales, which measure the annualized number of new single-family homes sold in December 2016, were 536,000, lower than analysts’ expectation of 585,000. It’s the lowest level for the past ten months. Earlier, there were three consecutive months of gains. The housing market recovery remains intact as a tightening labor market boosts wage growth.

How Economic Numbers Have Been Influencing Gold

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Unemployment claims rose

Last week, the unemployment claims figure, which measures the number of individuals who filed for unemployment insurance for the first time during the past week, was 259,000. That’s higher than analysts’ expectation of 247,000. The higher-than-expected unemployment number is negative for the economy in general.

Mining-based funds such as the iShares MSCI Global Gold Miners (RING) and the Sprott Gold Miners ETF (SGDM) have seen 30-day trailing rises of 15.9% and 16.7%, respectively. However, their prices fell over the past five trading days.

Mining shares that kept increasing despite the loss in precious metals include B2Gold (BTG), Royal Gold (RGLD), GoldCorp (GG), and Sibanye Gold (SBGL). These companies have five-day trailing rises of 2.8%, 1.7%, 1.1%, and 2.6%, respectively. Combined, they make up about 15.9% of the fluctuations in the VanEck Vectors Gold Miners ETF (GDX).

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