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What Kept a Hold on Gold on September 9?



Precious metal technicals

Gold futures for December expiration fell 0.53% and gave a close of $1,334.5 per ounce on September 9, 2016. Gold, however, was able to maintain a trailing-five-day gain of 0.46%. The call-implied volatility in gold fell to 14.6% on the same day. Call-implied volatility measures the change in the price of an asset with respect to the changes in the call option’s price.

Silver futures for December expiration were also trading low and closed at $19.4 per ounce on September 9. The RSI (relative strength index) readings for gold and silver were at 49 each. Their readings once again plummeted due to their price falls.

Silver’s sharp price fall is shown in the chart above.

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What impacted precious metals?

Another factor that affected precious metals on September 9 was that US wholesale inventories remained unchanged in July 2016, and sales recorded their biggest fall in six months, suggesting a modest boost to third-quarter economic growth from inventory investment. A positive sentiment in the economy often sets precious metals rolling south.  

Mining-based funds such as the Global X Silver Miners ETF (SIL) and the Sprott Gold Miners ETF (SGDM) also fell 6.5% and 6.1%, respectively, on September 9. Mining shares such as Aurico Gold (AUQ), Newmont Mining (NEM), New Gold (NGD), and Agnico-Eagle Mines (AEM) also fell 2.8%, 5.5%, 5.2%, and 7%, respectively. Combined, these four companies make up 13.4% of the fluctuations in the VanEck Vectors Gold Miners ETF (GDX). The RSI readings of these miners also fell on their falls in price.

Let’s look at the giant mining companies and their RSIs in our next article.


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