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Gold and Silver Pulled Back, Platinum and Palladium Rebounded

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Jan. 25 2016, Updated 10:08 a.m. ET

Precious metal volatility

The instability in precious metals has been a victim of the rattled global markets. Gold and silver generally rise on days when stocks fall, and they pulled back on days when equities rebounded. However, platinum and palladium closely followed the market sentiment and reacted in the same direction.

On Thursday, January 21, as the equity markets and oil price bounced back after a long rough cycle, gold and silver retreated 0.72% and 0.47%, respectively. Gold closed at $1,098.20 per ounce after touching a low of $1,092.50 per ounce. This implied volatility as gold once again dropped to 13.4% from the previous day’s 15.8%.

[marketrealist-chart id=989822]

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Miners swing

The negatively impacted precious metals and the buoyed stock markets left the mining stocks see-sawing. Mining stocks Royal Gold Inc. (RGLD) and Newmont Mining (NEM) gained 1.8% and 0.79%, respectively, on Thursday, January 21. However, Gold Fields Inc. (GFI) and Aurico Gold Inc. (AUQ) slipped 1.9% and 2.8%, respectively. These four companies together make up 14.6% of the VanEck Vectors Gold Miners ETF (GDX). The indicator marginally gained 0.47% on the same day.

Of the mining-based leveraged funds, the Direxion Daily Gold Miners ETF (NUGT) and the Direxion Daily Junior Bull Gold 3X ETF (JNUG) also gained 0.93% and 0.80%, respectively.

Platinum and palladium prices rebounded as they gained 0.04% and 2%, respectively. Platinum closed at $819.50 per ounce, and palladium closed at $499.00 per ounce. These two precious metals are frequently used as industrial metals in the automotive sector, where they are used as catalysts. The rebound in the stock markets likely buoyed the market sentiments and pulled these metals up.

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