uploads///Gold Price versus SP GSCI

Gold, Silver, and Platinum Rose while Palladium Fell


Apr. 8 2016, Published 5:35 p.m. ET

Surge in precious metals

Most of the precious metals saw an up day on Tuesday, April 5, 2016. Gold, silver, and platinum rose 0.84%, 1.2%, and 0.86%, respectively. Palladium, however, lost approximately 1.6%. The rise in the precious metals was most likely led by the fall in the equity markets. The weak global economic data pushed stocks lower, which concerned investors.

Gold has proven to be the best performer in 2016 so far, outperforming all other commodities and also other asset classes. Among the 24 commodities listed on the S&P GSCI (Goldman Sachs Commodity Index), gold stands at number one on a year-to-date basis, whereas silver holds the fifth position. The below chart shows the comparative price performance of gold and the S&P GSCI index over the past one year. As you can see, there was a significant surge in gold compared to the other commodities.

The precious metals rose, but left palladium behind, as it often reacts more as an industrial metal than a precious metal. It tends to follow the overall market.

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Technical indicators

The volatility in gold price has been almost flat at about 16.5% in the past few days. The RSI (relative strength indicator) level has also been slowly declining to 49. An RSI level above 70 indicates overvaluation, whereas below 30 is a sign of undervaluation.

The rise in gold and silver lifted up funds like the iShares Gold Trust (IAU) and the iShares Silver Trust (SLV). These two funds also increased 1.4% and 1.6%, respectively, on Tuesday.

The miners’ shares that gained a fortune include Cia De Minas Buenaventura (BVN), Gold Fields (GFI), and IamGold (IAG). These three companies rose 9.1%, 5.5%, and 5.1%, respectively. Together the three companies make up 8.1% of the VanEck Vectors Gold Miners ETF.


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