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Gold's 4-Week High: Precious Metals Insights

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Gold's 4-Week High: Precious Metals Insights PART 1 OF 4

Behind Gold’s 4-Week High

Movements in gold and silver

Gold hit a four-week high on July 24, 2017. Gold futures for August expiration touched a high of $1,259 per ounce on the day, ending up at $1,254 per ounce. However, the day’s close was still marginally lower than its close on Friday.

Silver joined gold in its slight fall on July 24. Silver fell 0.09% on the day, ending at $16.4 per ounce. Platinum remained the biggest loser of the day, falling 0.56% and closing at $929.4 per ounce. Palladium was the only precious metal to rise, ending the day at $854.3 per ounce.

Behind Gold&#8217;s 4-Week High

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Gold and silver have seen substantial recoveries in their prices over the past week, rising 1.7% and 2.1%, respectively, on a trailing-five-day basis.

The dollar’s influence

The revival in precious metals has likely been due to the recent fall in the US dollar. The US Dollar Index as depicted by DXY has fallen ~1.2% over the past week, and it’s seen a whopping 3.4% fall over the past 30 trading days. The fall in the dollar is most likely due to the euro’s two-year high.

Precious metals often move in tandem with the US dollar, as they’re all greenback-based assets. Their demand can be negatively affected by a rising dollar and positively affected by a falling dollar.

Mining shares and ETF exposure

The revival among precious metals also led to a substantial rise in mining shares such as Royal Gold (RGLD), Goldcorp (GG), Primero Mining (PPP), and Yamana Gold (AUY). These four miners have seen trailing-five-day-trailing rises of 3.5%, 1.9%, 5.4%, and 1.6%, respectively.

Combined, these four miners make up ~16.7% of the VanEck Vectors Gold Miners ETF (GDX). GDX has risen ~0.32% over the past five days.

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