RECENT Commodity ETFs RESEARCH
Gold is a hedge against inflation. When prices rise, investors can park their money in gold. It isn’t clear how well gold protects investors.
Precious metals had a bright first quarter, which ended March 31, 2017. Gold rose about 8.4%, marking its best quarter in almost a year.
A rise in interest rates can negatively affect gold and silver funds like the iShares Gold Trust (IAU) and the iShares Silver Trust (SLV).
Precious metal stocks with higher correlations to their respective metals are often more affected by global indicators.
Silver has performed slightly better than gold and platinum on a year-to-date basis.
All four precious metals witnessed a rise in price on Monday, March 20, as the US dollar slipped to its six-week low.
When the interest rate hike took place on March 15, 2017, much of the upside in precious metals had already been priced in by the market.
Prior to the Fed’s rate hike on March 15, precious metal investors had been keeping a close eye on the employment figures released on Friday, March 10.
When analyzing the precious metals market, it’s important to take a look at the relationship between gold (IAU) and silver (SLV).
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.
The US equity markets (SPY) (SPX) have rebounded since President Trump took office. As expected, precious metals have fallen in the past few months.
Precious metals fell again on Friday, March 3, 2017. The most important factor playing on precious metals is the interest rate phenomenon.
Gold futures for April expiration fell for the second straight day on March 1, 2017, as the US dollar showed strength.
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.
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.
The market’s current volatility could give a positive bounce to gold.
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.
Gold enthusiasts seem to be in a fix, as any further movements in the precious metal are currently unclear. The world famous SPDR Gold Shares ETF has risen ~11% in 2017 so far.
Investors are looking forward to the upcoming speeches by Federal Reserve members. They’re expected to speak about the US economy and a possible rate hike.