How Could Economic Numbers in the US Affect Gold?



Economic numbers

Much of the fluctuations in precious metals are dependent on the overall economic environment. As the world’s major economy, the US gave out some significant numbers that could impact the stance of the economy, as well as precious metals. On January 19, 2017, the Labor Department’s import numbers report was expected to show prices rising 0.7% in December 2016 after falling 0.3% in November. 

Among the other important numbers posted on January 19 that could affect the environment, the Philly Fed Manufacturing Index, which measures the level of a diffusion index based on surveyed manufacturers in Philadelphia, was at 23.6. This reading was much higher than the expectation of 16.3. 

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Gold funds and stocks

The unemployment claims figure, which measures the number of individuals who filed for unemployment insurance for the first time during the past week, was 234,000—lower than the overall analyst forecast of 252,000. The building permits were close to the expected numbers.

The chart above illustrates how precious metals could firmly react to the uncertainty in the markets, which in turn are dependent on the overall economic numbers as mentioned above. The Volatility Index, or VIX, is one of the major determinants of the risk in the market. The funds that closely track the performance of gold and silver includes the iShares Gold Trust ETF (IAU) and the iShares Silver Trust ETF (SLV).

Miners that can also react to price changes in precious metals include Newmont Mining (NEM), New Gold (NGD), Alamos Gold (AGI), and First Majestic Silver (AG).


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