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How Has 2018 Started Out for Gold and Silver?

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Gold and silver fluctuations

With the exception of platinum, all four precious metals witnessed a down day on Friday, January 5. Gold, silver, and palladium were down 0.21%, 0.02%, and 0.57%, respectively. Platinum increased 0.53%. Gold and silver futures for January expiry were, however, trading higher. They were up 0.07% and 0.09%, respectively.

Gold traded at $1,320.3 an ounce, while silver ended at $17.2 per ounce. Their RSI (relative strength index) levels are at 97.5 and 92.9, respectively. The higher RSI levels indicate a possible downward revision in price. The call implied volatility for the two were at 8.6% and 15.4%, respectively.

Fund analysis

The above chart shows the revival in the two core precious metals after the Fed’s decision to increase interest rates. The iShares Gold Trust (IAU) and the iShares Silver Trust (SLV) track the price movements in gold and silver. The funds have both risen 2.1% over the past five trading days.

Many analysts think that investment rotation among different asset classes, including the newly popular digital currencies, could be distracting investors away from gold. Overall, the market is eyeing the Federal Reserve’s interest rate decisions, which could be dependent on economic parameters.

Economic data

As of January 5, the unemployment rate, which measures the percentage of the total workforce that is unemployed and actively seeking employment during the previous month, was at 4.1%, which was in line with analyst expectations. The non-farm employment change was at 148,000, much lower than the expected 190,000. A lower number for this metric is negative for the economy in general.

The negative sentiment in precious metals on Friday also spread to the miners. Harmony Gold (HMY), Coeur Mining (CDE), Sibanye Gold (SBGL), and B2Gold (BTG) were down 2.1%, 1.7%, 0.93%, and 1.7%, respectively, on Friday.

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