Precious metals rebound
Gold futures traded on COMEX, the commodity division of the New York Mercantile Exchange, rebounded on Thursday, November 19, 2015. Gold gained 0.86% and closed at $1,077.9 an ounce. Moreover, all the other precious metals rebounded. Silver futures surged 0.98%, closing at $14.3 an ounce. Similarly, platinum and palladium saw an up day, gaining 1.2% and 1.7%, respectively. Precious metals are most likely taking their price movements from the directions given by the Federal Reserve on the interest rate hike move.
The 0.86% rise was the highest gain gold saw in prices started sliding at the start of November. You can see a three-day pivot chart for gold above.
Will the Fed opt for liftoff?
After the Fed’s meeting minutes were released on November 18, the December rate hike appears to be a move to be taken with a lot of caution. As investors are keeping a close watch on the Fed’s moves, the Fed’s stance on the liftoff is causing drifts in the prices of gold. If the Fed decides to hike the interest rates, precious metals would likely have a hard fall. The lifting of the rates above the zero mark will curb the appeal of non-interest bearing assets like gold and silver.
The rise in prices on November 19 was most likely due to the US dollar falling against the basket of the world’s six major currencies. However, the day ended positively for the dollar as it gained a low 0.07%. The mining-based ETFs saw a green day as the Sprott Gold Miners ETF (SGDM) and the leveraged ETF Direxion Daily Gold Miners (NUGT) gained 2.4% and 10.5%, respectively.
The mining companies that surged owing to the rebound include First Majestic Silver (AG), Alamos Gold (AGI), and Newmont Mining (NEM). These three stocks make up approximately 7% of the VanEck Vectors Gold Miners ETF (GDX).