Gold fell on rising dollar
Gold futures for April expiration fell for the second straight day on March 1, 2017, as the US dollar showed strength. Gold fell by about $3.90, dipping almost 0.3% from the previous day’s close to close at about $1,250 an ounce. Silver for May delivery rose marginally by 0.1%, settling at $18.50 an ounce. Platinum receded almost 1.2% to close at $1,018.9 per ounce, while palladium rose 1% to close at $779 an ounce.
Rising expectations of an interest rate hike in the current month are affecting precious metals, especially gold. The higher interest rates surge, the lower the demand for non-yield-bearing assets like gold and silver.
Another important factor that has been impacting precious metals is the US dollar. We’ll discuss the correlation between gold and the dollar in our next article.
Mining shares were affected
The fall in gold also resulted in falls gold-based funds like the iShares Gold Trust (IAU) and the ETF Physical Swiss Gold Shares (SGOL). Most mining stocks also saw their prices fall over the past one week. Barrick Gold (ABX), Pan American Silver (PAAS), Yamana Gold (AUY), and Primero Mining (PPP) fell 4%, 5.3%, 2.8%, and 8.8%, respectively, over the past five trading days. Combined, these four miners make up about 13.1% of the VanEck Vectors Gold Miners Fund (GDX).