Gold prices fall
This series analyzes gold prices and market fundamentals. For an in-depth look at gold and related companies, sectors, and drivers, please refer to our Gold ETFs page.
June gold futures trading in COMEX fell by 1.42% and closed $1,187.60 per ounce on May 26, 2015. Prices fell due to weak demand and the strong US dollar.
Gold tracking ETFs like the SPDR Gold Trust (GLD) and the iShares Gold Trust (IAU) also mirrored gold prices. They fell by 1.39% and 1.35%, respectively, in yesterday’s trade. Similarly, the VanEck Vectors Gold Miners ETF (GDX) also fell in Tuesday’s trade.
Lower buying activity in the Indian market fueled negative sentiments in the bullion market. Indian jewelers and retailers’ sluggish buying activity added pressure to gold prices. China and India represent 54% of the global gold demand. Slowing demand from China will also put pressure on gold prices.
On the global front, the strong US dollar dragged gold prices lower. The US dollar appreciated against the basket of currencies due to strong US inflation figures and better prospects of the rising interest rate by the Federal Reserve. Industry consensus suggests that the Federal Reserve might increase the interest rate by September 2015. The strengthening US dollar makes dollar denominated gold expensive. So, demand drops and gold prices decline.
This is the fifth down day for gold prices in the last ten trading sessions. Gold prices increased by 0.07% more on the average up days than on the average down days, over the same period. Gold performed badly against all of the other commodities in yesterday’s trade. Gold prices rose by 0.54% YTD (year-to-date)—led by improving demand from India.
NYMEX-traded natural gas futures for July delivery plunged by 2.25% on Tuesday. Natural gas prices declined due to slowing demand—led by the moderate weather consensus.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.