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What Trump Could Mean for Precious Metals

PART:
1 2 3 4 5 6 7 8 9
Part 4
What Trump Could Mean for Precious Metals PART 4 OF 9

These Gold Funds Are Feeling the Fall of Gold

GLD funds falling

As precious metal prices have fought to recover in 2017, funds such as the world famous and most actively traded SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) have followed suit, with YTD (year-to-date) rises of almost 3% and 4.2%, respectively, as of January 11, 2017.

Meanwhile, gold crossed the $1,200 mark, and its RSI level also rose to almost 60, as compared to the low levels of 23 in mid-December. The 14-day RSI level of more than 70 indicates a possibility of a downward reversion in price, whereas a level below 30 indicates a possibility of an upward reversion. Although gold initially fell after interest rates were raised in December, it has slowly begun to recover in 2017.

These Gold Funds Are Feeling the Fall of Gold

These Gold Funds Are Feeling the Fall of Gold

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Impact on miners

November showed a heavy fall in money flowing into gold. The holdings of the GLD fund, the world’s largest gold-backed exchange-traded fund, rose 0.37% to 807.96 tons on Friday, January 13, as compared to the previous day. According to the World Gold Council, gold funds’ holdings saw a 4% fall overall month-over-month in December 2016, with holdings fell ~97 tons.

Precious metal mining companies had witnessed a similar fall in 4Q16, but then they saw prices recover in January. Mining shares like AngloGold Ashanti (AU), Cia De Minas Buenaventura (BVN), Barrick Gold (ABX), and Coeur Mining (CDE) saw their prices rise, with 30-day trailing gains of 6.8%, 16.8%, 7.8%, and 11.8%, respectively. Together, these four miners make up 15.1% of the total portfolio holdings of the Vaneck Vectors Gold Miners Fund (GDX).

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