Market unrest

If we look at the historical performance of precious metals to markets, we see that gold has been closely tracking market volatility. The recent upheaval in the markets, led by Syria tensions, supported precious metals. Also, the earlier trade war fears with China lifted precious metals higher.

The below chart compares the performance of gold (IAU) to the overall volatility in the market. We saw these two indicators moving together during the end of March and the beginning of April. The last one week has seen a divergent performance. The Volatility Index, or VIX (VIXY) (VXZ), was close to 24% at the end of March.

How Market Unrest Is Affecting Gold

Gold hedge

As gold is famously known as a haven asset, market unrest and uncertainty make it more valuable. Investors often opt for safe-havens like these as the market gets unstable and geopolitical tensions rise.

Another indicator that gold tends to keep track of is the equity market performance. Often, when the equity markets rise, investors opt for these yield-bearing assets, which causes gold to fall. The two often give divergent performances.

Though the precious metal mining companies are broadly a part of the equities, they often take their directional move from gold and other precious metals. Mining stocks like Alamos Gold (AGI), B2Gold (BTG), First Majestic Silver (AG), and Sibanye Gold (SBGL) rose 1.1%, 1%, 2.1%, and 6.2%, respectively, on Wednesday.

Latest articles

WeWork is gearing up for an IPO. On Wednesday, the company made its IPO filing with the SEC public and expects to garner $3.5 billion from its IPO.

After FCC Chairman Ajit Pai recommended the approval of the T-Mobile–Sprint merger, Representative David Cicilline urged the FCC to allow public comment.

Cresco Labs (CRLBF) is set to report its Q2 earnings on August 21 after the market closes. The company's stock fell 5.3% yesterday.

Cannabis stocks mostly traded in positive territory today. Supreme Cannabis (FIRE) and Aurora Cannabis (ACB) rose about 9.5% and 5.5%, respectively.

NVIDIA (NVDA) stock soared 6% in today’s trading session as its Q2 earnings for fiscal 2020 beat estimates. However, its guidance missed estimates.

Nio Inc. (NIO) has disrupted the automotive space since 2014 but only made waves in the market since its IPO. Investors have suffered numerous setbacks.