At 6:30 AM EST on March 1, the West Texas Intermediate crude oil futures contract for March 2017 delivery was trading at $54.16 per barrel—a gain of ~0.28%.
Coeur Mining (CDE), Yamana Gold (AUY), Randgold Resources (GOLD), and Cia De Minas Buenaventura (BVN) stocks have seen five-day trailing losses.
Japan is witnessing diminishing monetary stimulus that could boost the price of gold.
On February 21, John Williams, the president of the Federal Reserve Bank of San Francisco, cautioned investors that the global fall in interest rates could make it harder for central banks to keep their economies steady.
Much has been said about the rise in inflation over the past few months, so its impact on gold plays a major role for gold investors.
The rise in precious metals over the last few months has been due to insecurity among investors, given the political climate.
As the US dollar lost some ground on February 20, 2017, its weakening gave a push to gold prices. Gold rose ~0.2% over its previous trading day’s close.
A reduction in volatility could mean a downward swing for gold, and an increase in inflation could mean more demand for gold.
Sibanye Gold has the closest correlation to gold on a YTD basis among the four miners under review.
Last week, the S&P 500 gained in four out of five trading days and closed at record highs. On February 16, the S&P 500 VIX Index rose 5.8% to 11.49.
Last week, Fed Chair Janet Yellen’s comments boosted the probability of an interest rate hike in March to almost 34%.
Changes in the US dollar play crucially on the fluctuations of precious metals.
The market’s current volatility could give a positive bounce to gold.
Gold, the big brother of precious metals, initially lost momentum on February 14, 2017. That day, the US dollar gained strength.
Market uncertainty is the primary reason for optimism in gold. However, Trump’s plans to increase expenditures could provide a boost to inflation.
During December’s end 2016 and January 2017, Stanley Druckenmiller once again became keen on gold, maybe due to the rising unrest following the election of President Donald Trump.
As the fear of another interest rate hike persists, investors are skeptical about gold. An idea about gold’s possible direction can be taken from the investment activities of famous hedge fund managers.
The uncertainty surrounding the Trump administration has led to a rise of almost 10% for gold since its ten-month lows in December 2016.
Gold prices tumbled on Tuesday, February 14, as the US dollar rose after the US Federal Reserve chair, Janet Yellen, seemed optimistic about raising interest rates.
Janet Yellen said on Tuesday, February 14, that the US economy could likely be on a growth path and that the Fed could increase interest rates as early as its next meeting.