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Gold and Silver Pose Weakness while Platinum Traded Flat

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Jan. 12 2016, Updated 6:35 a.m. ET

100-day moving average

Investors saw several precious metals tumble to lower levels as stock markets along with investor sentiment rebounded on Friday, January 8, 2016. Silver remained the worst-performing precious metal, falling almost 3% and closing $0.43 lower than the previous day close. Silver settled at $13.9 per ounce. Its current prices are trading at a 5.7% discount from its 100-day moving average price of $14.7 per ounce.

The RSI (relative strength indicator) was trading at 46. The RSI level around 30 signifies undervaluation, whereas the figure above 70 signifies overvaluation.

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Gold fell 0.9% and gave a close of $1,097.9 per ounce. Gold prices are at a 1.8% discount from its 100-day moving average price, and the RSI level is at 58. Platinum and palladium prices, however, stabilised on Friday. Platinum maintained a small trading range and closed a marginal 0.01% lower than the previous day close. Platinum is trading at a 5.7% from its 100-day moving average price. Palladium too traded flat and gave a close of $493.6 per ounce, marginally 0.1% higher than the previous day close. Palladium is trading at a whopping 17.8% discount from its 100-day moving average price, suggesting a plausibility of a rebound.

Miners stumble

The plunges in platinum and palladium were most likely due to the weak global clue, especially in the huge market of China. The rebounding of the markets most likely buoyed the platinum-group metals as they’re extensively used for industrial purposes. The storing of value precious metals like gold and silver fell as the global equity markets bounced back.

The fall in precious metals took along companies involved in the mining business like Hecla Mining (HL), Silver Wheaton (SLW), and Agnico Eagle Mines (AEM). These three companies together make up 11.1% of the VanEck Vectors Gold Miners ETF (GDX). The leveraged mining-based ETFs like the Direxion Daily Gold Miners (NUGT), and the Direxion Daily Junior Bull Gold 3X (JNUG) fell 7.3% and 8.3%, respectively, on Friday.

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