Gold and GLD
The bears in the precious metal markets seem to be active. The gold futures for February expiry fell by $27.2 and closed below $1,050. The 2.5% fall in gold futures also extended to the SPDR Gold Shares (GLD). GLD lost $2.25 of its share price and closed at $100.5 per share. It’s GLD’s lowest close in about a month. On Thursday, the trading volumes in GLD remained high.
Gold traders pushed gold lower. It touched a day low of $1,047 per ounce. The tightening by the Fed caused gold to fall. It erased the six-year gains in the metal. Currently, gold is trading at a six-year low.
GLD is trading at a 5.9% discount from its 100-day moving average price. This brightens the possibility of a reversion. The RSI (Relative Strength Index) for GLD is also at 35.5. This suggests that the asset could be undervalued.
Although the Fed stressed that the rate hike will be gradual, it could put off the bears in the market for more than a day. Precious metals rose on December 16 right after the Fed gave its stance. However, December 17 slammed gold lovers. The prices fell to record lows.
Beside GLD, other gold-based ETFs like the iShares Gold Trust (IAU) fell by 2.1%. The mining companies that were the biggest losers on Thursday include First Majestic Silver (AG), Barrick Gold (ABX), and Coeur Mining (CDE). These stocks fell by 10.8%, 9.3%, and 9.1%, respectively. Together, they account for 8.1% of GDX.