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.
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).
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.
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.
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.
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.
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.
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.
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 […]
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.
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.
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.
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.
The Fed raised the interest rate in March, which increased pessimism for precious metals. But soon after the rate hike, precious metals started reviving.
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.
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 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 […]
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.
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.
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.
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.
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.
Mining companies that have high correlations with gold include Agnico Eagle Mines (AEM), Alacer Gold (ASR), Alamos Gold (AGI), and AngloGold Ashanti (AU).
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.
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.
Increasing gold premium Gold has reached a ten-month low, with the federal interest rate pushing the yield-bearing precious metals lower. The slide in the precious metals started after Trump’s victory, due to the rising US dollar. The drastically lower prices could have led to an increase in demand, but this did not happen. The demand […]
Call implied volatility takes into account the changes in an asset’s price due to variations in the price of its call option. In economic turbulence, volatility is higher.
Palladium has seen a YTD rise of a whopping 32.5%, which is higher than the rise in platinum, silver, and gold. Earlier, palladium was underperforming its precious metal peers.
Gold futures for December expiration posted the biggest gain in almost four weeks as the US Dollar Index (or DXY) fell. It was its highest mark in a decade.
