uploads///Gold and Dollar Fluctuations

These Factors Are Playing on Gold and Precious Metals Today


Nov. 14 2017, Updated 4:58 p.m. ET

DXY drop

Gold touched its three-week high level on Thursday, November 9, of $1,289.5 and closed at $1,287.5 per ounce. Gold futures for December delivery were 0.3% higher that day.

Silver and palladium fell 0.96% and 1.1% the same day, and platinum rose 0.28%, though palladium touched its highest peak since 2011 of $1,023.3 per ounce, ending the day at $1,004.4 per ounce.

The rise in gold on Thursday was led by the decline in the US dollar. The US dollar is depicted here by the DXY currency, which prices the dollar against a basket of six major world currencies.

As precious metals are dollar-based assets, they swiftly drop with any increase in the dollar, as investors from other countries find the dollar (UUP) to be more expensive, causing demand for dollar-assets to suffer.

DXY fell 0.44% on Thursday and has now seen a YTD (year-to-date) loss of 7.6%.

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Other market factors

Much of the fluctuations among precious metals could also have been due to the US President Donald Trump’s tax reform plans. Markets are focused on potential tax cuts right now, while Wall Street seems to be unsure about the outcome of tax reform legislation in Congress.

Essentially, the dollar seems to be the main indicator controlling precious metals and funds like the iShares Silver Trust (SLV) and iShares Gold Trust (IAU), which have risen 1.8% and 1.2%, respectively, on a 30-day trailing basis.

The mining shares that have seen gains on a 30-day trailing basis include Minas Buenaventura (BVN), Yamana Gold (AUY), AngloGold Ashanti (AU), and Franco-Nevada (FNV), which have risen 1.4%, 1.5%, 2.6%, and 5.7%, respectively, over the past 30 days.


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