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Gold Soared and GDX Rose by 4.4%, Oil Reached New Lows

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Jan. 8 2016, Updated 1:26 p.m. ET

Gold’s rally continued

The following graph shows a market overview as of January 7, 2016, when the US stocks were turbulent.

In the graph, the US dollar is represented by the PowerShares DB US Dollar Bullish ETF (UUP). Oil is represented by the United States Oil Fund (USO). Gold is represented by the SPDR Gold Trust (GLD). The Treasury bond market is represented by the iShares 20+ Year Treasury Bond (TLT). Volatility is represented by the Index, Volatility S&P 500 (^VIX).

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In the above chart, you can see that US equities are represented by the SPDR S&P 500 ETF (SPY) and the Direxion Daily S&P500 Bull 3X ETF (SPXL). They fell for the second consecutive day. Amid rising volatility, investors preferred safe havens. Therefore, gold rose by 1.4% and settled at $1,103.90 per ounce. The prices of the Treasury bonds rose by 0.2%. This lead to a fall in the Treasury yields. The VanEck Vectors Gold Miners ETF (GDX) rose by 4.4%. The stocks of gold mining companies Newmont Mining (NEM), Barrick Gold (ABX), Goldcorp (GG), and Royal Gold (RGLD) rose by 1.6%, 10.2%, 7.7%, and 4.7%, respectively, on January 7.

Oil fell to new lows

Oil fell for the fourth consecutive day. It reached new lows. The geopolitical situation between Saudi Arabia and Iran combined with the slowdown in China added to its woes. The supply glut already created downward pressure on the commodity. The fall in fuel consumption, especially in China, is alarming. Therefore, WTI (West Texas Intermediate) crude fell by 2.1% and closed at $33.27 per barrel. Brent crude fell by $0.48 to settle at $33.75 per barrel. Suspecting a fall in demand for oil in the future, investors’ preference for energy-related stocks is lower. Oil’s new prices are killing the profits for oil and gas drilling and exploration companies. As a result, the companies’ stock prices are falling.

Next, we’ll look at how the material sector performed.

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