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Gold Fell Due to Economic Numbers and the US Dollar

PART:
1 2 3 4 5
Part 2
Gold Fell Due to Economic Numbers and the US Dollar PART 2 OF 5

Market Volatility Is Impacting Precious Metals

Unrest in the Middle East

Besides a few technical indicators that maintain a strong play on precious metals, the overall market sentiment could move precious metals.

Precious metals mainly had a positive day on Monday due to unrest in the market extended from the Middle East. The future king of Saudi Arabia, Crown Prince Mohammed bin Salman tightened his grip through an anti-corruption move. A few of the members of Saudi Arabia’s political and business elite were arrested. There were more arrests on Monday. A top entrepreneur was detained in the biggest anti-corruption purge in Saudi Arabia. The country appears to have spooked global markets with the spillover from oil flowing into other markets.

Global risk factors often boost precious metals like gold and silver. These two metals are highly favored during rising uncertainty in the market.

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The above chart shows the relationship between precious metals (IAU) (SLV) and overall market volatility depicted here by the Volatility Index or VIX.

Volatility indicators

On November 7, gold ended at $1,275.8 per ounce, which is lower than its two-month high level of $1,283.9 per ounce on Monday.

Precious metals had a mixed reaction on Tuesday. Eldorado Gold (EGO) and Cia De Minas Buenaventura (BVN) fell 3.2% and 1.4%, respectively, on Tuesday. Silver Wheaton (SLW) and Yamana Gold (AUY) rose 0.71% and 0.38%, respectively. Together, these four mining shares account for 16.3% of the fluctuations in the VanEck Vectors Gold Miners Fund (GDX).

Investors are also watching President Trump’s visit to South Korea. President Trump wants to find a solution to the threats from Pyongyang, which could provide some support for precious metals.

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