Meera Shawn

Precious metals were doing considerably well until the first half of April 2017. As investors’ risk appetites revived, haven assets slumped. Among these metals, silver has plummeted the most.

While the US dollar has seen a decline in 2017, the increased possibility of a Fed rate hike in June could give the currency some breathing room.

Metal investors have to study upward and downward trends as price change predictability can be affected by rises and falls in precious metal prices.

Geopolitical risks had been playing on haven bids for precious metals, but now, we may be seeing to be a temporary respite—however brief—from global worries.

Newmont Mining, Silver Wheaton, Randgold, and Yamana have RSI levels of 45.5, 37.1, 41.2, and 43.0, respectively.

The gold-platinum spread was ~1.3 on April 26, 2017. The gold-platinum spread RSI on that day was 59.

Among the leveraged mining funds, the Direxion Daily Gold Miners ETF (NUGT) and the Proshares Ultra Silver ETF (AGQ) have seen considerable losses over the past month.

Another important phenomenon that played on the fall of precious metals on Wednesday, April 19, was the upswing of the US dollar.

Mining stocks and precious metals As global tumult grips markets and investors are turning to mining stocks as safe havens, it’s crucial to understand which stocks are closely tied to precious metals. Stocks with a higher correlation with precious metals will likely be impacted more by global indicators that influence precious metals. The Direxion Daily […]

As global tumult grips markets and investors turn to mining stocks as safe havens, it’s crucial to understand which stocks are closely tied to precious metals.

Since the French elections are right around the corner, investors might start parking their money in safe-haven assets like gold.

Leveraged mining funds including the Direxion Daily Gold Miners (NUGT) and the Proshares Ultra Silver (AGQ) saw big jumps in early 2017 due to the revival in precious metals.

On a 30-day trailing basis, gold, silver, platinum, and palladium have risen 6.8%, 1.7%, 3.3%, and 5.5%, respectively.

As the markets experienced unrest on Tuesday, April 11, gold touched its five-month high of $1,275.10 per ounce.

Turbulence in markets due to the viability of the Trump Administration, the upcoming French elections, and the Brexit vote caused precious metals to rise.

As of April 6, 2017, the volatilities of New Gold (NGD), Agnico Eagle (AEM), Silver Wheaton (SLW), and Franco-Nevada (FNV) were 55.5%, 36.6%, 34%, and 30.1%, respectively.

When analyzing the precious metals market, it’s important to take a look at the relationship between gold (SGOL) and silver (SIVR).

As of April 4, 2017, the volatilities of New Gold (NGD), Agnico Eagle Mines (AEM), Silver Wheaton (SLW), and Randgold Resources (GOLD) were 51.5%, 35.4%, 61.7%, and 54.1%, respectively.

Precious metals had a bright first quarter, which ended March 31, 2017. Gold rose about 8.4%, marking its best quarter in almost a year.

Yamana’s correlation with gold has increased from a three-year correlation of ~0.74 to a one-year correlation of ~0.80.

Now that mining companies have begun witnessing revivals from their losses earlier this year, it becomes crucial to examine the volatility figures and RSI.

Among the four precious metals, platinum has been the worst-performing precious metal and has seen a year-to-date rise of only 5.8%.

Overall sentiment in precious metals seems to be optimistic as global concerns keep piling up. There was unrest on Monday following the failure of the AHCA.

NUGT and AGQ have seen YTD rises of 18.6% and 27.5%, respectively. But the volatility of such mining funds can be higher than that of precious metals.

The volatility index may finally stop being stagnant and move upward, now that the fiasco of the GOP’s healthcare bill attempt failed to launch on March 24.

Mining funds such as the iShares MSCI Global Gold Min (RING) and the leveraged ProShares Ultra Gold (AGQ) have also seen significant correlations with their respective precious metals.

The economic performance of the overall world market has a considerable impact on precious metals, especially gold and silver.

When analyzing the precious metals market, it’s important to take a look at the relationship between gold and silver.

Silver has performed slightly better than gold and platinum on a year-to-date basis.

All four precious metals witnessed a rise in price on Monday, March 20, as the US dollar slipped to its six-week low.

Mining companies’ volatilities are significant to the buying process. The mining shares we’ve selected in this article are Kinross Gold, Eldorado Gold, IAMGOLD, and Harmony Gold.

As of March 15, the volatilities of Silver Wheaton, AngloGold Ashanti, Hecla Mining, and Kinross Gold were 38.2%, 36.2%, 29.3%, and 40.6%, respectively.

Uncertainty in the market significantly affects the performances of precious metals. It also affects precious metals mining stocks, which are known to closely track precious metals.

Monitoring the implied volatilities of large mining stocks is important. We should also watch their RSI (relative strength index) levels, particularly in the wake of changing precious metals prices.

The directional move of the interest rate is a crucial determinant of the direction precious metals will take.

Precious metal mining stocks are known to closely track the performances of precious metals.

Agnico-Eagle Mines has the highest correlation to gold year-to-date. Primero Mining is the least correlated to gold.

Mining companies with high correlations to gold include Randgold Resources (GOLD), Yamana Gold (AUY), Pan American Silver (PAAS), and Coeur Mining (CDE).

The demand for platinum has been very fragile over the past few years due to concerns about sales of diesel-based vehicles.

The gold-silver spread was trading at 68.5 on February 23, 2017. The spread suggests that it took 68.5 ounces of silver to buy a single ounce of gold.

It’s important to understand which mining stocks have overperformed and underperformed precious metals.

Mining companies that have high correlations with gold include B2Gold (BTG), Royal Gold (RGLD), Agnico Eagle Mines (AEM), and Primero Mining (PPP).

Sibanye Gold has the closest correlation to gold on a YTD basis among the four miners under review.

Platinum is known for its use in jewelry and as an autocatalyst for diesel-based automobile engines. The demand has been very fragile over the past few years.

Precious metal prices have risen due to uncertainty since Donald Trump won the US presidential election.

Precious metals prices have risen from the ten-month lows they saw in December 2016. As a result, most mining stocks have also risen substantially.

Gold prices tumbled on Tuesday, February 14, as the US dollar rose after the US Federal Reserve chair, Janet Yellen, seemed optimistic about raising interest rates.

The demand for platinum has been very fragile over the past few years, affected by the reduced market forecast for sales of diesel-based vehicles.

Call implied volatility takes into account the changes in an asset’s price due to variations in the price of its call option.

The rate hike phenomenon in December 2016 played negatively for precious metals.