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Gold and silver have seen trailing-five-day losses of 0.9% and 2.7%, respectively. The reason behind the fall in the precious metals is the buoyancy of the equity markets and the gains in the US dollar.

Economic data from the United States on Tuesday, July 21, 2016, on home starts and building permits affected gold and other precious metals to a certain extent.

Precious metals often run in the opposite direction of stocks. Whenever the risk appetite of investors is high, stocks tend to perform well.

India and China make up 50.0% of the global demand for physical gold. When gold prices fall, physical gold-buying provides support for gold.

The rise in precious metals over the last few months has been due to insecurity among investors, given the political climate.

As the Federal Reserve released minutes from its December meeting, gold prices jumped higher.

Janet Yellen, chair of the Federal Reserve, noted that the Fed is planning to change the annual stress tests it gives to US banks. The test results would reveal whether the banks can withstand a massive financial crisis.

As per the U.S. Bureau of Labor Statistics, the US Consumer Price Index (or CPI) rose 0.2% in February, compared to a 0.5% rise in January 2018.

The Fed’s interest rate hike On December 14, 2016, the Fed finally raised interest rates by 25 basis points. More concerning from an investor’s point of view was the Fed’s targeted total hike of 75 basis points in 2017. The Fed’s first meeting for 2017 is on March 14 and 15. The market is quite certain that […]

The Aberdeen Latin American Equity Fund – Class A (ALEAX) fell by 4.2% in December 2015 from a month prior.

Physical gold demand India and China constitute ~50% of the global demand for physical gold. These markets are price sensitive, so when gold prices fall, physical gold-buying in these markets provides support for gold. In this article, we’ll see if demand from India and China could accelerate in 2017. Indian gold demand India’s demand for gold […]

The financials sector has been primarily responsible for ALEAX’s posting -24.6% returns in the year-to-date period ended November 2015.

The Fed raised the interest rate in March, which increased pessimism for precious metals. But soon after the rate hike, precious metals started reviving.

JLTAX’s assets were invested across 57 holdings as of November 2015, and it was managing assets worth $62.3 million.

The US dollar and precious metals are usually inversely related to each other.

After the renowned bearish sentiment for gold, we saw a little hope on July 31, 2015. Physical gold and silver sales accelerated.

The correlation between gold and the US Dollar Index is now -0.43, which means that about 43% of the time, gold and the dollar are moving in opposite directions.

Precious metals have witnessed downward pressure over the past few months due to the expectation that US monetary policy is on a tightening path.

The continued turmoil in the markets in 2016 was one of the major determinants of precious metal prices.

Gold futures for February expiration slipped 0.3% and traded at $1,155.2 an ounce.

Alacer Gold and Eldorado Gold are trading below their shorter-term 20-day and longer-term 100-day moving averages.

Most mining companies reversed their 2015 losses during the first few months of 2016 and have posted substantial gains. There is a high correlation between mining stocks and precious metals.

According to the most recent survey by Bank of America/Merrill Lynch (BAC), fund managers were cautious ahead of the US presidential election and concerns regarding the European Union.

Gold lost most of its sheen as 2016 drew to a close, and its last trading day of the year closed on a sour note. Gold futures for February expiration were down almost $5.20 on December 30, 2016, compared to the previous trading day.

After witnessing a rebound on Friday, precious metals fell again on Monday, July 2. Gold fell 0.88% to close at $1,242 per ounce.

The gold-silver spread is 77, indicating that it takes ~77 ounces of silver to buy one ounce of gold. In May, this spread stood at 78.

Whereas palladium has been the strongest among the four precious metals over the last month, it has fallen 7.2% year-to-date, possibly due lower car demand in China.

Palladium has been the weakest among the four precious metals on a YTD (year-to-date) basis.

A crucial factor that continues to affect gold is the US dollar.

Precious metals had another up day as gold futures for April expiration rose 0.48% on Friday, April 13, closing at $1,344.80 per ounce.

According to the US Bureau of Labor Statistics, the US consumer price index (or CPI) rose 2.4% year-over-year (or YoY) in March 2018.

Gold futures for April expiration were trading at $1,336.3 an ounce on Monday, April 9.

In this part of our series, we’ll analyze the correlation between gold and four mining stocks: Hecla Mining (HL), Kinross Gold (KGC), Eldorado Gold, (KGC), and Alacer Gold (ASR).

A crucial factor that continues to affect gold is the US dollar.

The rise in gold on Wednesday was most likely due to the ongoing unrest in markets due to concerns about the US-China trade war.

The most recent data for the US Consumer Price Index (or CPI) was weaker than expected.

On March 22, US president Trump signed a memorandum that could impose tariffs on $60 billion of imports from China.

The two most critical precious metals, gold and silver, rose on March 23, rising 1.4% and 1% in spot markets.

With more interest rate hikes likely to come in 2018, analysts expect precious metals and miners to underperform.

All four precious metals saw a down day on Monday, March 5. Gold, silver, platinum, and palladium were down 0.23%, 0.33%, 0.31%, and 0.81%, respectively.

All four precious metals witnessed an up day on Thursday, February 22, 2018.

Among the four miners that we’re discussing, New Gold and Sibanye Gold have a YTD loss of 13.7% and 7.7%, respectively.

The Fed has long been expecting inflation to pick up. Its targeted 2% inflation rate has been eluding it for more than five years, but the latest US jobs report indicates that inflation could finally get a boost.

Monday, January 29, 2018, was a down day for all four precious metals. Gold, silver, platinum, and palladium fell 0.73%, 1.5%, 0.35%, and 0.42%, respectively.

Global world equities, tracked by the MSCI ACWI ETF (ACWI), increased ~7.6% since the beginning of 2018.

Many analysts assume that the rise in gold’s price last week may have been supported by the tailwinds that caused the cryptocurrency market (ARKW) to slump, with Bitcoin correcting almost 30%.

As we know, precious metals are closely tied to movements in US interest rates. Bonds and equities are both yield-bearing assets, so a rise in yields often causes a slump in demand for assets such as gold and silver.

Gold is a non-yield bearing asset that reacts negatively to rises in the interest rate.

Palladium has been the winner among the four precious metals, having skyrocketed a whopping 57% on a YTD (year-to-date) basis in 2017 as of December 27.

Gold and the US dollar are mostly inversely related to each other.

All four precious metals had an up day on December 20, 2017. Gold increased 0.43% on the day and closed at $1,267.80 per ounce.

Precious metals rebounded after the Fed increased the interest rate on December 13.

The US dollar (UUP) fell 0.71% on December 13—the day the Federal Reserve raised interest rates a quarter point to 1.25%–1.50%.

Although the US dollar has been the most important element contributing to changes in precious metals, the upcoming December meeting of the Federal Reserve has taken all of investors’ attention.

If we look at the performances of precious metals in relation to the dollar over the past few weeks, we see a visible inverse relationship.

We’ll briefly analyze mining stocks’ correlation with gold. Gold is the most crucial of the precious metals, and mining stocks tend to increasingly take their price changes from gold.

If we look at the YTD (year-to-date) correlations of the select mining shares to gold, there has been a reasonable fall.

All four precious metals saw a down day on Monday, December 4, 2017, after the US dollar, in which the four metals are priced, rose $0.39%, propelled by the Senate passing its tax reform bill.

The US stock markets were closed on Thursday, November 23, 2017, for Thanksgiving, and the next day (Black Friday) was quite slow for precious metals. Gold played in a narrow range that day.

The dollar and interest rates As December approaches, discussion of a potential interest rate hike is growing. A hike is of particular concern to market participants because it could affect equities, currencies, and commodities. A higher interest rate for US Treasuries usually causes investors to move their money to the United States, raising demand for the dollar and […]

Mining stocks’ reaction On Tuesday, October 31, precious metal mining stocks fell, following precious metals. In this part of our series, we’ll look at the moving averages and returns of four key mining stocks: Silver Wheaton (SLW), Hecla Mining (HL), Alacer Gold (ASR), and IAMGOLD (IAG). Hecla Mining and Alacer Gold have fallen 9.9% and 10.3%, respectively, YTD […]

Gold, silver, platinum, and palladium have a five-day trailing loss of 0.67%, 0.44%, 1.1%, and 1.5%, respectively.

Much of the discussion surrounding another interest rate hike in December has been about how inflation numbers have remained low.

Gold reached its two-week high price of $1,294.5 an ounce on Tuesday, October 10, and ended the day at $1292.1 per ounce.

The US dollar and global tensions have been crucial in determining the prices of precious metals and mining shares. On Monday, October 2, mining shares saw mixed movement against precious metals.

North Korea’s first missile launch over Japan pushed gold prices to a near one-year high, prompting investors to move to safe-haven assets.

Gold is a famous hedge against inflation. A reduction in volatility could mean a downward swing for gold.

When reading the platinum market, it’s important to analyze the comparative performance of platinum and gold by using the gold-platinum ratio or spread.

On July 12, the gold–silver spread was 76.4. This ratio indicates that it takes almost 76 ounces of silver to buy a single ounce of gold.

The more optimistic investors are about the economy, the less they need haven assets like gold and silver.

The gold-silver spread touched a peak of 85 in late 2008. The RSI level of the gold-silver ratio is 80.8, suggesting a possible pullback in the spread.

Gold and silver had been negatively impacted over the past few days as speculations concerning the Fed’s June decision hang heavily in the air.

Much of the attention on precious metals is focused on the US Federal Reserve’s decision to keep hiking the interest rate in 2017.

Physical demand fell in 1Q17 Physical gold demand fell 18% in 1Q17, according to the WGC (World Gold Council). Investors most likely dumped the metal to bet on riskier assets after the US presidential election. The demand in 1Q17 was 1,034 tons, the lowest in 11 years. ETF inflows suffered greatly compared with last year, […]

Silver’s slump In addition to being a precious metal, silver has several industrial uses. Silver, primarily used for the production of electronic items, serves as a good indicator of how the economy is performing. Among precious metals, silver has been the most heavily impacted over the past month. On a trailing-30-day basis, silver has dropped ~9.4%, gold […]

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.

Among the four precious metals, silver has been the worst-performing metal over the past month.

After President Donald Trump ordered the launch of nearly 60 Tomahawk cruise missiles on a Syrian air base, precious metals and oil took off.

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.

Gold is a hedge against inflation. When prices rise, investors can park their money in gold. It isn’t clear how well gold protects investors.

Silver was also lower by 0.3%, ending at $18.20 an ounce after having touched a one-month high of $18.40 on the previous trading day.

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.

On a year-to-date basis, AngloGold Ashanti, Hecla Mining, Eldorado Gold, and Alacer Gold have seen reasonable rises of 25.8%, 23.1%, 14.3%, and 31.7%, respectively.

Donald Trump’s victory in the 2016 US presidential election initially shook fear into precious metal investors.

The uncertainty surrounding the Trump administration has led to a rise of almost 10% for gold since its ten-month lows in December 2016.

Among the four precious metals, palladium has shown the strongest performance, and its market fundamentals are upward scaling.

Agnico-Eagle Mines has the closest correlation to gold on a YTD basis among the four miners under review. Alacer Gold is the least correlated with gold.

It’s important to monitor the implied volatilities of large mining stocks as well as their RSI levels, particularly after changes in precious metal prices.

Agnico-Eagle Mines has the closest correlation to gold on a YTD basis among the four miners under review. Alacer Gold is the least correlated with gold.

The reason behind the fall of the dollar on Friday, January 27, 2017, was lower-than-expected GDP numbers. The DXY ended the day 0.10% higher.

Agnico-Eagle Mines has the closest correlation with gold on a YTD basis among the four miners under review. Alacer Gold is the least correlated with gold.

In the shorter run, physical supply and demand figures do not do much to affect the price of precious metals like gold. But in the long run, they can.

Agnico-Eagle Mines has the closest correlation with gold on a YTD basis among the four miners under review. Alacer Gold is the least correlated with gold, mainly due to its YTD losses.

The gold-platinum spread was approximately 1.6 on January 11, 2017. Its RSI (relative strength index) was as low as 40.

In this part, we’ll look at the implied volatilities of large mining stocks and their RSI levels in the wake of precious metal prices.

Mining companies that have high correlations with gold include Agnico Eagle Mines (AEM), Alacer Gold (ASR), Alamos Gold (AGI), and AngloGold Ashanti (AU).

Among the other precious metals trading on the COMEX, silver shares for March expiration maintained an almost flat end to the day on January 11, 2017.

The markets are uncertain ahead of the January 20, 2017, inauguration of Donald Trump. The uncertainty may give more breathing room to precious metals.

Hedge funds and money managers cut their net long positions in gold to a nearly 11-month low and trimmed bullish bets in silver contracts in the week ended December 27, 2016.