Gold Is the Dominant Precious Metal



Precious metals’ rout in 2015

Commodities are proving to be the worst performing asset class in the current scenario. As much as $2 billion was shed from the ETFs tracking the bullions, gold, silver, platinum, and palladium. Precious metals are taking the lead. The Gold for August delivery was the most actively traded contract on Monday, July 20. It fell 2.20% and closed at $1,106.80 per ounce.

The 30-day trailing loss for silver (SI) has been 5.34%. Platinum (PL) fell 8.26% and palladium (PA) fell 7.83%. It’s important to note that gold (GC) fell 6.78%. The figures confirm the downward trend in all of the above precious metals. Gold and silver are traded the most. Gold is also affected the most affected in terms of economic indicators. It’s also loved the most by precious metal investors.

The above chart gives a brief view of gold’s three-month performance.

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Technical indicators

The gold and silver spread return fell 0.73% on the last trading day. Trading volumes have seen an upside compared to the average ten-day trading volume for gold. Platinum and palladium saw a fall in the trading volumes on a ten-day average basis.

Just like gold, gold miners are also affected the most during the rout. Sibanye Gold (SBGL), B2Gold (BTG), and Aurico Gold (AUQ) fell 7.25%, 2.63%, and 4.50%, respectively, on a five-day trailing basis. Gold mining ETFs like the VanEck Vectors Gold Miners ETF (GDX) and the VanEck Vectors Junior Gold Miners ETF (GDXJ) also declined.

VIX indicator

Volatility indicates the changes in the price of a given asset—in this case, the commodity. The implied volatility for precious metals has been on an upside considering the average ten-day basis. The current implied volatility for gold (GC) is 16.72 and silver (SI) is 26.06. This confirms that the metals aren’t close to their stable long-run prices.


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