How Sentiments surrounding the Dollar Are Playing on Gold, Miners
On a year-to-date basis, AngloGold Ashanti, Hecla Mining, Eldorado Gold, and Alacer Gold have seen reasonable rises of 25.8%, 23.1%, 14.3%, and 31.7%, respectively.
Mining companies that have high correlations with gold include B2Gold (BTG), Royal Gold (RGLD), Agnico Eagle Mines (AEM), and Primero Mining (PPP).
Precious metals mining stocks are known to closely track the performances of precious metals. Mining stocks often display more volatility than precious metals.
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.
The most important indicators for this week are flash manufacturing PMIs and the Eurozone consumer confidence index.
According to a Eurostat report, Eurozone 4Q16 economic growth expanded to 0.4%, which was the same as in the previous quarter but below the preliminary market estimates of 0.5% growth.
According to a report from Eurostat, Eurozone industrial production fell 1.6% in December 2016 as compared to a 1.5% rise in November 2016.
According to the EIA’s (Energy Information Administration) report on February 15, 2017, US crude oil inventories rose 9.5 MMbbls (million barrels) in the week ended February 10, 2017.
According to a report from the US Census Bureau, US retail sales rose 0.4% in January 2017 as compared to a 0.6% rise in December 2016.
According to a report from the United States Bureau of Labor Statistics, US CPI (consumer price index) showed a strong improvement in January.
The Germany ZEW indicator of economic sentiment (EWG) rose to 10.4 points in February 2017 as compared to 16.6 points in the previous month.
According to a report from the Center for European Economic Research (ZEW), the Eurozone ZEW indicator of economic sentiment improved at a slower rate in February 2017.
In this series, we’ll take a look at the Eurozone ZEW economic sentiment index and the Germany ZEW economic sentiment index for February 2017.
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.
Barrick Gold (ABX), Buenaventura Mining (BVN), AngloGold Ashanti (AU), and Harmony Gold (HMY) are trading above their 20-day and 100-day moving averages.
The gold-silver spread was trading at 68.3 on February 16, 2017. The spread suggests that it took almost 68 ounces of silver to buy a single ounce of gold.
The RSI levels for mining giants Newmont, Silver Wheaton, AngloGold, and Hecla rose due to their rising stock prices.
Palladium has seen an upward movement, rising almost 16.5%. The demand for the metal is strongly outstripping its supply.
Platinum is known for its use in jewelry and as an autocatalyst for diesel-based automobile engines. The demand has been very fragile over the past few years.