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Are US-China Jitters Affecting Precious Metals?

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Precious metal movements

Gold, silver, platinum, and palladium increased 0.33%, 1%, 2.4%, and 4.2%, respectively, on Monday. Gold futures for April expiration were trading at $1,336.3 an ounce on Monday, April 9. The volatility in gold was at 10.4%, while its RSI level was at 59.7. Silver futures for April expiration closed at $16.5 per ounce. Silver’s volatility was at 17.4% and its RSI level was at 58. Platinum and palladium were at $933.9 and $933.5 an ounce, respectively. These two metals are once again at the same level, so it will be interesting to see which one picks up from here.

The SPDR Gold Shares (GLD) and the iShares Silver Trust (SLV) were up 0.34% and 0.84% on Monday. While GLD has a YTD gain of 2.6%, SLV has a YTD loss of 2.7%.

Trade war jitters

Much of the movement in precious metals over the past few days has been due to fears of a trade war between China and the US. Donald Trump had threatened on Thursday to impose an additional $100 billion in tariffs on Chinese imports. However, on Sunday, he expressed optimism about the situation.

It seems like the market has overall become immune to the trade jitters. The US dollar continues to play a role in gold and silver movements, which we’ll explain in the next article.

According to data from CFTC (or Commodity Futures Trading Commission), hedge funds and money managers had cut their net long position in COMEX gold in the week to April 3. They increased their net short position in silver to a record high on Friday, April 6.

Some of the mining shares that reacted in the opposite direction to precious metals include Kinross Gold (KGC), Eldorado Gold (EGO), Alacer Gold (ASR), and Harmony Gold (HMY). They were down 8.6%, 0.83%, 0.98%, and 3.7%, respectively.

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