uploads///Gold versus VIX indicator

Market Volatility Is Rising, Buoyed Gold


Jan. 12 2016, Updated 1:25 p.m. ET

Volatility higher

Bullion prices rose in the first week of January. They eventually fell as the equity markets started standing on their toes. This increased the overall bullion volatility. The volatility in all of the global markets rose due to the Chinese turmoil as well as North Korea and the Middle East. Gold and silver are precious metals. They’re used to store value during turbulent times. The prices witnessed a rise due to calls for safe havens.

Although silver mainly accompanies gold in the rise and fall, it couldn’t take in as much interest from investors as gold. Future gold prices rose by 1.7% during the past five trading days. Silver, platinum, and palladium fell by 0.83%, 5.5%, and 12.5%, respectively, during the same period.

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Mining carnage

The above chart shows the value of gold in times of uncertainty. Investors flock to gold during turbulent times. The recent upheaval lifted mining-based ETFs and stocks along with gold. However, these mining indicators seem to be more sensitive to the fall in precious metal prices than the rise. Mining ETFs like the Global X Silver Miners ETF (SIL) and the VanEck Vectors Junior Gold Miners ETF (GDXJ) fell by 4.5% and 2.4%, respectively, during the past five trading days.

Mining-based stocks that were the worst performers on a five-day trailing basis include B2Gold (BTG), First Majestic Silver (AG), and Royal Gold (RGLD). They fell by 17.5%, 14.3%, and 10.1%, respectively. Together, these three stocks account for 6.9% of the price changes in the VanEck Vectors Gold Miners ETF (GDX).


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