Reading the Movements: Precious Metals and Miners
Gold futures fell on Friday, September 15. Gold saw a weekly loss after three straight weeks of gains. Gold was down almost 1.9% last week. Gold futures for December expiration were down 0.3% on Friday and closed at $1325.2 per ounce. Silver and platinum also fell—0.5% and 0.93%, respectively—on Friday. Palladium was the only precious metal that was trading higher for the day. It rose 0.81%.
The US dollar was also trading lower for the day, falling 0.27%. Usually, gold and the US dollar diverge. However, Friday was an exception. The rise in the dollar is negative for gold, as it’s a dollar-denominated asset and investors find it difficult to invest in the higher-priced dollar and its assets. Since the beginning of 2017, the US dollar index (UUP) has fallen 10.1% while gold has risen 13.6%.
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The above chart shows the performance of gold and the US dollar over the past couple of years. You can see what looks like a diversion in performance.
Miners that join the tumble
Going ahead, investors will probably be eyeing the economic data that comes out of the biggest economy in the world, the United States. Figures could offer clues about foreseeable economic strength and hint at the Federal Reserve’s decision on interest rates. No rate hike is expected for the upcoming meeting, which ends on Wednesday.
Among the precious metal miners that also fell on Friday due to the precious metal drop are Sibanye Gold (SBGL), Gold Fields (GFI), Agnico-Eagle Mines (AEM), and Pan American Silver (PAAS). They fell 1.6%, 1.6%, 1.5%, and 0.67%,™ respectively.