Gold spent another day in the red as the US dollar, depicted by the DXY Currency Index, appreciated more. The DXY Currency rose 0.08% on Thursday, December 10, which caused a fall in gold of 0.42% and a fall in silver of 0.56%.
The strength of the US dollar makes dollar-denominated precious metals more expensive for buyers using other currencies. However, more importantly, it is the looming Federal Reserve decision on the interest rate lift-off that is keeping a lid on the precious metals for now. Gold has lost about 1.4% on a five-day-trailing basis. Silver, platinum, and palladium have dropped 3.2%, 2.9%, 4%, respectively, on a five-day-trailing basis.
The premiums on gold in the Indian market have seen a fall in the past few weeks, likely signalling that the rebound in gold had kept off the investors waiting for a further downfall. However, the demands in China remained high due to the upcoming spring festivals in the country. The weakness in the oil markets is also a concern for gold investors, as lower oil prices may cause inflation to linger at lower levels.
Tracking the miners
The mining-based ETFs that have survived the downfall in the precious metals include the Direxion Daily Gold Miners ETF (NUGT) and the VanEck Vectors Junior Gold Miners ETF (GDXJ). They have gained 1.6% and 0.41%, respectively, on a five-day trailing basis. The mining companies that have also rebounded from the previous lower share prices include Agnico-Eagle Mines (AEM), Primero Mining (PPP), and Centerra Gold (CG). These three companies together contribute 7.1% to the VanEck Vectors Gold Miners ETF (GDX).