Gold versus equities
The US dollar extended its longest winning streak in about one month during the past week. The rise in the dollar was due rising speculations about the interest rate hike by the Fed. The hawkish statements by a few Fed members raised hopes for an earlier hike. The rise in the dollar weighed down crude oil, precious metals, and also a few of the emerging markets. The fall in the crude oil market also took down US stocks.
Emerging market equities snapped a five-day rally and retreated. Tumbling energy stocks also pulled the S&P 500 lower. It had the biggest drop in almost two weeks. The S&P index is depicted here by the SPDR S&P 500 ETF (SPY). The changes in gold prices are observed here by the SPDR Gold Shares (GLD).
Mining equities suffered
The S&P 500 index retreated 0.6% and closed at 2,036.7 on Thursday, March 24. The volumes in the past week also remained small because the week was shortened due to Easter holidays. The Stoxx Europe 600 Index also fell 0.1% after climbing as much as 0.6%. The MSCI Asia Pacific Index lost ~0.9% as Japanese shares fell. Mining stocks in that region also fell.
The losing momentum for equities alongside the loss in precious metals impacted some of the precious metal mining stocks. Companies that saw substantial losses during the past week include Eldorado Gold (EGO), Barrick Gold (ABX), and New Gold (NGD). These three companies retreated 10%, 8.3%, and 8.5%, respectively. Together, these three companies contribute 12.9% to the price fluctuations in the VanEck Vectors Gold Miners ETF (GDX). The fall in the mining shares had a dual impact from the fall of the equities markets and the retreat in the metals.