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Gold Falls Again as Its Haven Appeal Falters

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Nov. 26 2015, Updated 4:29 p.m. ET

Gold and silver fall

Volume in the markets is expected to dry up as US investors celebrate Thanksgiving. Gold once again saw a down day on Wednesday, November 25, 2015. Gold’s most active December contract fell 0.34% and closed at $1,069.70 per ounce. Silver, too, fell marginally by 0.09%, closing at $14.20 per ounce.

Precious metals surged on Tuesday, November 24, due to growing concerns about the Russian jet downed by Turkey. The call implied volatility in gold, its price sensitivity having fallen to almost $14 compared to its mid-month volatility.

Platinum and palladium also rose on November 24. The stocks rose 0.26% and 1.8%, respectively. However, both metals have underperformed gold and silver. Platinum and palladium have 30-day-trailing losses of 14.6% and 18.2%, respectively.

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No more haven appeal

Gold rose almost 1% on the news of geopolitical tensions between Russia and Turkey. However, its haven appeal seems to have diminished, as it was unable to rise for a second day following Turkey-Russia tensions. Prices are hovering just above the lowest level seen for about six years.

The iShares Gold Trust ETF (IAU) and the SPDR Gold Shares ETF (GLD) also fell due to gold’s fall in price on November 25, 2015. The ETFs fell 0.47% and 0.58%, respectively.

Mining companies showed a mixed performance on Wednesday as some surged and some retreated. New Gold (NGD) and Alamos Gold (AGI) were among the top gainers, rising 2.8% and 2.1%, respectively. However, South African mining companies AngloGold Ashanti (AU) and Gold Fields (GFI) lost 3.4% and 3.6%, respectively.

The four mining companies NGD, AGI, AU, and GFI together make up 11.3% of the VanEck Vectors Gold Miners ETF (GDX).

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