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Gold Rises to Its 3-Month High, then Retreats

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Jan. 28 2016, Updated 5:16 p.m. ET

Gold and silver fell

Gold and silver prices fell after the FOMC (Federal Reserve Open Market Committee) gave its stance on the rate hike conundrum. The Fed was likely eyeing global market performance and accordingly made its call on the interest rate hike.

As expected, the Fed chose not to move the rates. Gold benefited, touching a high of $1128.7 per ounce on January 27, 2016. This is the highest mark seen by gold in almost three months.

The Fed still actively maintains its take on the raising of interest rates and remains focused on a gradual rate rise throughout 2016. Fed funds futures now price an 18% chance of a hike in March. This figure is down from the 25% chance stated on January 26 before the Fed meeting.

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ETFs and mining equities

Precious metals prices had earlier witnessed a rise, but tumbled as equities stabilized on the same day. Though gold and silver fell marginally by 0.38% and 0.72%, respectively, the iShares Gold Trust ETF (IAU) rose 0.28%, and the iShares Silver Trust ETF (SLV) only marginally fell by 0.07%.

Though mining companies gave a mixed performance on January 27, 2016, and gold fell slightly after touching a three-month high, most miners still saw a green day. Alamos Gold (AGI) and New Gold (NGD) rose 7.6% and 5.6%, respectively. However, Buenaventura (BVN) and AuRico Gold (AUQ) fell 0.72% ad 2.8%, respectively.

These four stocks together make up 7.2% of the price changes in the Market Vectors Gold Miners ETF (GDX). GDX rose 1.7% on the same day.

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