Largest one-day loss in October
The most actively traded gold futures contract for December delivery closed 0.87% lower at $1,172.80 an ounce on the Comex division of the New York Mercantile Exchange. The decline of $10.30 was the largest one-day dollar and percentage decline seen in October 2015. Prices had seen a gain of 2.4% in the past week.
Silver also fell 1.7% and had seen a five-day trailing loss of 0.74%. Precious metals may see further meltdown as the dollar gains. The US dollar, or the DXY currency that prices the US dollar against the major world currency basket, has seen a rise of 0.14% on a five-day trailing basis. Gold prices fell Monday on the stronger dollar and upbeat US housing data.
Gold also pulled back after US homebuilder sentiment rose in October, soothing worries about the economic health of the country. The housing statistics likely clouded the outlook for US interest rates, sapping investor interest in gold. If concerns over US economic health subside, we could still see a rate hike in the current year. A rate hike could hurt precious metal prices. After the news that China’s economic growth slowed to 6.9% in the third quarter, silver saw a steep decline and closed below the $16 mark at $15.80 per ounce.
Tracking ETFs and mining companies
The iShares Gold Trust (IAU) and the Direxion Daily Gold Miners ETF (NUGT) both fell on Monday by 0.53% and 12.1%, respectively. Mining companies that saw a down day on Monday include Cia De Minas Buenaventura (BVN), Royal Gold (RGLD), and Agnico-Eagle Mines (AEM). These three stocks make up 12.8% of the VanEck Vectors Gold Miners ETF (GDX).