Precious metals investors are carefully watching the overall market sentiment. The performance of the economy will likely determine the course of interest rate hikes by the Federal Reserve.
Monitoring the implied volatilities of large mining stocks is important. We should also watch their RSI (relative strength index) levels, particularly in the wake of changing precious metals prices.
Compared to last week’s slump, precious metals prices rebounded on March 13, 2017. Haven demand for precious metals likely resurfaced ahead of the elections in Europe.
Precious metal mining stocks closely track precious metals. Precious metal leveraged funds have fallen recently due to the slump in precious metals.
The uncertainty of the markets not only closely impacts precious metals, but also precious metal mining stocks.
Recent changes in the prices of precious metals primarily depend on the directional move of interest rates for US Treasuries.
The directional move of the interest rate is a crucial determinant of the direction precious metals will take.
The US equity markets (SPY) (SPX) have rebounded since President Trump took office. As expected, precious metals have fallen in the past few months.
During times of global and economic turbulence, volatility is higher than in a stagnant economy.
The RSI level for the VanEck Vectors Gold Miners ETF (GDX) is near 16, suggesting that it could see an upward price correction soon.
About 50.0% of the time, Alamos Gold has moved in the same direction as gold in the last year.
Fluctuations in the prices of precious metals depend largely on the direction of US interest rates.
Precious metals fell again on Friday, March 3, 2017. The most important factor playing on precious metals is the interest rate phenomenon.
In 2016, the budget deficit rose to $587.0 million, a 30.0% rise from 2015.
Japan leads the nations with its rising debt-to-GDP ratio. The United States is in seventh place.
The gross federal debt at the end of 2016 was $19.5 trillion. It’s estimated at more than $20.0 trillion for 2017.
Precious metal mining stocks are known to closely track the performances of precious metals.
After touching their lowest mark during the past two months, gold prices marginally rebounded on Monday, March 6.
On a year-to-date basis, many mining stocks have seen a loss. Alamos Gold (AGI), Agnico Eagle Mines (AEM), and Primero Mining (PPP) have fallen 2.3%, 4.5%, and 31.9%, respectively.
Precious metal prices have risen due to uncertainty since Donald Trump’s inauguration on January 20, 2017.