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These Global Factors Are Affecting Gold


Apr. 7 2017, Updated 7:37 a.m. ET

Fed’s hawkish stance

The Federal Reserve’s March minutes, which were released on April 5, ended with a hawkish tone, as the central bank suggested that it would be taking steps at trimming its $4.5 trillion balance sheet later this year as long as economic figures stay strong. This made the precious metals tumble. Gold futures for May expiration were 0.8% lower at $1,248.50 per ounce.

Silver was also lower by 0.3%, ending at $18.20 an ounce after having touched a one-month high of $18.40 on the previous trading day. Platinum also joined gold and silver and dropped 0.3%. Palladium was the only precious metal that was trading 0.5% higher than its previous close.

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Global threats

The ADP non-farm employment change numbers, which measure the estimated change in the number of people employed during the previous month, excluding the farming industry and government, was positive at 263,000, much higher than the analyst expectation of 184,000.

The continuous flow of global events has been considerable, affecting the precious metals and also funds like the SPDR Gold Shares (GLD) and the iShares Silver Trust (SLV). The GLD Fund ended flat on Wednesday, while the SLV fund dropped about 0.06%. Precious metals received some support after the chemical attack in Syria. 

The mining stocks that rose on Wednesday despite the fall in gold and silver include AngloGold Ashanti (AU), Alacer Gold (ASR), Yamana Gold (AUY), and Franco-Nevada (FNV). These four stocks rose 1.7%, 1.1%, 1.4%, and 1%, respectively, on Wednesday. Together, the four miners make up about 10.3% of the VanEck Vectors Gold Miners Fund (GDX).


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