The Sweet Spot on the Seesaw
Moving away from cash in either direction on the seesaw increases return. On the rate-sensitive side, moving away from the center increases duration—a measure of interest-rate risk—but investors are compensated with higher yields.
India and China remain the top two consumers of gold (IAU) and silver (SLV).
A rise in US Treasury yields causes a slump in precious metals because these metals bear no intermediary cash flows, and investors prefer yield-bearing assets.
Ongoing worries in North Korea and political chaos in Washington have been crucial in boosting the prices of precious metals.
After the rise we saw on Friday, October 13, precious metals had a down day on Monday, October 16.
Gold rose to a three-week-high level of $1,304.1 per ounce on Friday, October 13, and closed at $1,302.9.
Much of the discussion surrounding another interest rate hike in December has been about how inflation numbers have remained low.
During the FOMC (Federal Open Market Committee) meeting in September, many officials showed interest in another rate hike in 2017—and more in 2018.
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 reached its two-week high price of $1,294.5 an ounce on Tuesday, October 10, and ended the day at $1292.1 per ounce.
According to the employment data that came out last week, US employment fell in September for the first time in about seven years.
All the four precious metals saw an up day on Monday, October 9, 2017.
Gold rose on Wednesday, October 4, 2017, after having touched its seven-week low price of $1,269.2 an ounce.
Precious metals had a slow day on Tuesday, October 3, 2017. They traded almost flat, falling only minimally and maintaining the downward sentiment.
On Monday, October 2, the SPX Index, depicted by the SPDR S&P 500 ETF (SPY), rose 0.42% on Monday and ended at $252.30.
China, along with the rest of the world, has experienced a long-running decline in productivity growth—a decline that accelerated after the Global Financial Crisis.
According to the data by the Commodity Futures Trading Commission on September 29, large speculators have cut their bullish net positions in gold futures.
Equities and safe-havens like gold are historically known to move in opposite directions because gold is often seen as a hedge against overall market risk.
The negative sentiment toward gold prevailed on Friday, September 29, the last trading day of the month. Gold futures for November expiration fell 0.3%.
The latest US GDP stood at 3.1%, which was just higher than the analyst expectation of 3%.