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Is Gold Rising as the Rate Liftoff Seems Delayed?

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Bullion rises

All precious metals on Tuesday, October 6, saw a rise in their prices. Gold and silver futures for December delivery rose 0.77% and 1.76%, respectively. Tuesday was the third straight day of positive returns on gold and the fourth day of positive returns on silver. Silver closed at the price of $15.984 an ounce. Platinum and palladium rose 2.390% and 2.685%, respectively. Palladium has been the best-performing precious metal on a 30-day trailing basis, rising 23.40%.

Escaping the doldrums, it looks like gold has seen a ray of hope. It has been edging up in recent weeks because of the expectations that the US Federal Reserve may delay a hike in interest rates.

 

Can gold rally?

Whether the final quarter of 2015 could see a rally in gold prices remains a key question for the masses. However, some analysts are doubtful that the precious metals will rise much higher than their current mark. The UBS (or the Union Bank of Switzerland) points out that the precious metal remains reluctant to rise higher despite easing expectations of an increase in interest rates by the Fed in the current year.

Weak job data seem to be further postponing the rate hike, which may not happen until 2016. All eyes are set on this week’s forthcoming sales data, which can boost the dollar and accelerate the rate liftoff. However, under the current scenario, gold prices are on a rising trend, and a delay in the rate liftoff may lead to a further rise in gold in 2015.

Tracking ETFs and miners

Mining companies that can also rise due to rising gold prices include Agnico Eagle Mines (AEM), Gold Fields (GFI), and Eldorado Gold Corporation (EGO). These three companies contribute ~13% to the VanEck Vectors G0ld Miners ETF (GDX). Leveraged ETFs that have seen their prices rise are Direxion Daily Gold Miners (NUGT) and Direxion Daily Junior Bull Gold 3X (JNUG).

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