Why precious metals fell
Gold fell from its three-month high on Tuesday, February 7, 2017, falling nearly 0.20% and trading at $1,233.40 per ounce. It peaked at $1,235.80 per ounce that same day.
The other three precious metals followed suit:
- Silver fell 0.2.0% and ended the day at $17.70 per ounce. It hit a high of $17.80 per ounce.
- Platinum fell 0.70% from the previous day to $1,004.70 per ounce. The day’s high was $1,015.20 per ounce.
- Palladium was the biggest loser among the four precious metals, falling 1.5% to $760.80 per ounce.
The strength of the US dollar was one of the primary reasons for the fall in precious metals. The rise of the dollar was due to the fall in the euro, backed by weaker German industry data and added speculation ahead of the French elections.
Impact on funds and miners
The above graph shows the comparative price performance of gold against the US dollar. The higher the dollar surges, the lower the demand is for dollar-based assets such as gold and silver.
Funds that closely monitor the performances of gold and silver include the iShares Silver Trust (SLV) and the SPDR Gold Shares (GLD). These two funds have risen 11.0% and 7.0%, respectively, year-to-date.
Mining shares have also rebounded in January after retreating in November and December. First Majestic Silver (AG), Harmony Gold (HMY), Silver Wheaton (SLW), and AngloGold Ashanti (AU) have all had 30-day trailing gains.