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Gold and Its Miners: Analyzing Performance amid Global Concerns

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Gold and Its Miners: Analyzing Performance amid Global Concerns PART 1 OF 5

The Reaction of Precious Metals on October 11

A down day for precious metals

The last few days have seen a rise in precious metal prices. However, on Wednesday, October 11, 2017, the prices of these loved metals fell. Gold, silver, and platinum fell 0.37%, 0.43%, and 0.33%, respectively, that day, while palladium rose 2.7%.

Gold futures for November expiration were 0.37% lower for the day and ended at $1,287.30 per ounce. Silver futures for December delivery ended 0.43% lower to close at $17.10 per ounce. Call-implied volatility in silver rose to 17.9%, while gold’s call-implied volatility was 10.2%. Call-implied volatility is a measurement of the fluctuations in the price of a stock with respect to changes in the price of the call option.

The Reaction of Precious Metals on October 11

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Korean tensions

The changes in precious metals are also impacted by the overall volatility and risk element in the market. On Tuesday, October 10, 2017, the United States flew two B-1 aircraft over the Korean Peninsula, and President Donald Trump held a meeting with top defense officials to discuss how to respond to any threats from North Korea. However, these events didn’t have a profound impact on the market as havens stayed low and the dollar fell on Wednesday.

The ups and downs in the market are known to have a positive play on gold. However, that didn’t happen on Wednesday, and the havens fell. The fall in precious metals didn’t affect mining funds. The Global X Silver Miners ETF (SIL) and the VanEck Vectors Gold Miners ETF (GDXJ) rose 1.0% and 1.2%, respectively, that day.

Mining shares that rose included Kinross Gold (KGC), Iamgold (IAG), Coeur Mining (CDE), and Pan American Silver (PAAS), which rose 2.1%, 1.1%, 1.1%, and 0.98%, respectively.

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