Miners Followed Precious Metals Downhill on September 18
On September 18, Coeur Mining, Barrick Gold, Kinross Gold, and Eldorado Gold had volatilities of 42.3%, 26.4%, 40.8%, and 50.1%, respectively.
The Global X Silver Miners ETF (SIL) and the Sprott Gold Miners ETF (SGDM) fell 4.6% and 3.7%, respectively, on a five-day trailing basis due to the slump in gold and silver.
On a year-to-date basis, Sibanye Gold, Gold Fields, and Agnico Eagle Mines have risen 12.2%, 41.9%, and 12.5%, respectively.
In the absence of earnings growth to justify the current valuations of US equities, many investors may begin looking for trade that is less crowded.
While the two houses of US Congress have the power to raise the debt ceiling, it has become difficult to do so over the past few years.
According to the latest COT report, large precious metal speculators continued to increase their bullish bets on gold futures.
Outflows from ETFs led to a ~28% fall in gold prices in 2013—the equivalent of selling 881 tons of gold.
Oil imports are currently being paid through the US dollar, which supports the value of the dollar, but China is looking to change this equation.
The Wall Street analyst outlook for gold prices helps us understand the path that gold investments could take going forward.
The average cash balance is now 4.8%, which is higher than the ten-year average cash level of 4.5%.
After slipping somewhat in the beginning of September 2017 amid geopolitical concerns, US equity markets have rebounded once again.
Calendar 2017 has been a tough one for the US dollar (USD), which has fallen ~10% YTD (year-to-date).
Higher interest rates make interest-yielding investments attractive to the detriment of gold, which doesn’t provide yields in terms of regular income.
The consumer price index grew 0.4% month-over-month in August, compared with the 0.3% expected gain.
While economists were expecting job additions of 180,000 in August, the actual additions were just 156,000.
North Korea’s first missile launch over Japan pushed gold prices to a near one-year high, prompting investors to move to safe-haven assets.
Gold prices have been on a roll since July 2017, having risen from ~$1,200 per ounce to above $1,300 per ounce as of mid-September.
As of September 18, the consensus mean price target on CMP stood at $69.5 per share, which was about 1.6% lower than the closing price of $70 on the same day.
The Scotts Miracle-Gro Company (SMG) saw a sharp increase in its price last year.
Sociedad Quimica y Minera de Chile (SQM) has gained significant ground so far this year with the stock up by almost 105% as of September 18, 2017.