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How Did Precious Metals React to GDP Numbers?


Jan. 31 2017, Updated 12:35 p.m. ET

GDP numbers

Many of the changes in precious metals are determined by the overall health of the economy. The weaker-than-expected GDP numbers in the United States, the world’s largest economy, impacted its currency. The US dollar, as we know, has a significant impact on dollar-denominated assets. In the next part of this series, we’ll look at the impact of the US dollar on gold.
The quarterly advanced GDP numbers, which measure the annualized changes in the inflation-adjusted value of all goods and services, was 1.9%. That’s lower than analysts’ expectation of 2.1%. The core durable goods order was the same as the forecast of 0.50%. It’s the measure of the change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items. The durable goods order was also far below expectations.
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Mining funds plummeted

The US consumer sentiment was a little better at 98.5. Precious metals have been falling, as you can seen in the above graph, due to decreasing haven bids. The fall in gold and other three precious metals also led to falls in mining funds such as the Sprott Gold Miners ETF (SGDM) and the iShares MSCI Global Gold Miners (RING). They fell 0.71% and 0.47%, respectively, on a five-day trailing basis.

The fall in precious metals extended to some of the top mining shares, including Agnico-Eagle Mines (AEM), Primero Mining (PPP), Randgold Resources (GOLD), and Franco-Nevada (FNV). These four miners have seen five-day trailing losses of 0.68%, 0.88%, 1.6%, and 1.9%, respectively, as of January 26, 2017.

Gold fell 0.40% and closed at $1,183.90 per ounce after touching a low of $1,180.70. Silver, platinum, and palladium also fell.


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