Gold and silver technicals
Amid the recent upheaval in the markets, precious metals, especially gold and silver, are acting more like raw commodities than haven assets. Usually, the longer-term reaction in precious metals depends on market sentiment with more rises than falls during market unrest.
Silver is more volatile than gold and tends to be more closely associated with industrial demand. Gold and silver were trading at $1,259 and $16.30, respectively, on June 26. Their volatilities were 8% and 13.5%, respectively. The chart below shows that volatility spiked considerably during the second week of June when there were choppy markets for silver. The RSI levels for gold and silver were 29 and 51.3, respectively.
The famous gold- and silver-based funds that tend to closely track the performances of these metals are the SPDR Gold Shares (GLD) and the iShares Silver Trust (SLV), which have fallen 3.1% and 0.84%, respectively, over the last month.
The impact of the US dollar has also been substantial on these dollar-denominated assets. The revival of the US dollar in the last month has contributed to shaky gold and silver prices. The possibility of continued gradual interest rate hikes could also cause a downturn. Last week, Fed chair Jerome Powell said that rates could continue to rise to strike a balance between employment and inflation goals.
Among the precious metal mining companies that witnessed an up day on June 26 were Iamgold (IAG), Pan American Silver (PAAS), Franco-Nevada (FNV), and Silver Wheaton (SLW), which rose 1.6%, 0.29%, 1.7%, and 1.2%, respectively.