Gold prices have been retreating this season. Gold futures for February expiry booked losses of 0.77% on Wednesday, December 30. Gold touched a low of $1,058.5 an ounce on Wednesday and a high of $1,071.5 an ounce to close at $1,059.8. $1,058 is the lowest level gold has touched in about two weeks after a winning streak that resulted from the December Federal Reserve meeting.
Gold investors seemed to have given up on gold at the end of 2015, a year full of losses for gold. The trading volumes have gone down significantly. The number of actively traded contracts on the exchange is less than 100,000. The implied volatility in gold is also lower. It is currently trading at 13.1, which is about 16.8% lower than the 15.7 volatility seen prior to the Federal Reserve meeting in December.
The current trading price of $1,059.8 is at a 4.8% discount from the 100-day moving average of $1,113.4. The downward trending 100-day moving average price signifies the negative sentiment that is prevailing in the precious metal market.
The RSI (relative strength index) has also taken a drop to almost 43. An RSI figure close to 30 signifies undervaluation. The start of December saw RSI levels close to 30, and RSI gradually rose to almost 52 after the Federal Reserve meeting.
The gradual losses in precious metals have severely hurt mining companies and mining ETFs. The Sprott Gold Miners (SGDM) and the iShares MSCI Global Gold Min (RING) lost 1.9% and 2.5%, respectively, on December 30. Mining stocks like Kinross Gold (KGC), Eldorado Gold (EGO), and IamGold (IAG) also saw losses on Wednesday. These three companies make up 8% of the VanEck Vectors Gold Miners ETF (GDX).