Precious metal changes
Gold (GLD) touched a one-month low on Thursday, September 28, due to the rise of the US dollar over the speculation of another rate hike in December 2017. Gold futures for November expiration were 0.05% higher for the day and touched a high of $1,288.8, closing at $1,286.5 per ounce.
Silver rose 0.12% and ended the day at $16.8, while platinum dropped 0.05% and ended below palladium prices for the first time since 2001 at $922.5 per ounce. Palladium, for a change, was moving in accordance with gold and silver and rose 0.25% to close at $929.3 per ounce.
Dollar getting stronger
The US dollar or DXY Index has been scaling higher since the Federal Reserve took a hawkish stance during its September meeting. The possibility of a hike in the rate of interest offered on US Treasuries gave a kick to the dollar, and precious metals fell.
Any rise in the dollar is usually harmful to precious metals as the latter are greenback-denominated assets. The US dollar (UUP) and bond yields both rose on Thursday, September 28, after President Trump proposed the biggest tax overhaul in three decades.
Dollar fluctuations are also responsible for the movement in precious metals mining shares like Goldcorp (GG), Kinross Gold (KGC), Silver Wheaton (SLW), and Yamana Gold (AUY). These four shares have seen price drops over the last month due to the revival in the dollar, falling 5.4%, 3%, 5.1%, and 5.9%, respectively, on a 30-day trailing basis.
In the next part of this series, we’ll discuss the relationship between gold and US Treasury interest rates.