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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.

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.

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

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.

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).

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 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.

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.

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.

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.

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.

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.

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.

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

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.

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

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.

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.

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.

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.

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.

The correlation between gold and the US Dollar Index is -0.36. It means that about 36.0% of the time, gold and the dollar move in opposite directions.

Gold and silver have been strong for the past few days. However, silver has substantially outperformed gold year-to-date.

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.

The US dollar witnessed ten consecutive days of rises until November 18, 2016. The US dollar Index closed at 101.2 on the day.

The sudden rise in precious metals right after the election of the much-doubted Donald Trump can be compared to the rise in metals right after the unexpected Brexit vote result.

Since IAMGOLD acquired the Cote Lake project in 2012, its estimates indicate that the project’s resources have grown to more than 8 million ounces.

About 61.0% of the time, Kinross Gold has moved in the same direction as gold in the past year.

Palladium has seen a year-to-date rise of 13.6%. In the past 30 trading days, palladium has fallen 6.8%. It’s slipped 1.5% in the past five trading days.

Mining companies that have a high correlation with gold include New Gold (NGD), Newmont Mining (NEM), Alacer Gold (ASR), and IamGold (IAG).

Kinross saw its correlation with gold rise. It rose from an ~0.55 three-year correlation to an ~0.61 one-year correlation.

Most mining companies’ substantial returns have come about due to safe-haven bids that boosted gold and other precious metals.

Mining companies that have high correlations with gold include Kinross Gold (KGC), Eldorado Gold (EGO), Alacer Gold (ASR), and IAMGOLD (IAG).

Fear about how an interest rate hike would impact US Treasuries had a negative impact on precious metals as well as mining shares.

Precious metals saw a price rally in their prices on September 6, 2016, after the previous day’s trading holiday.

Price changes in the precious metals are in part a result of the fluctuations in the US dollar.

Precious metals fell for yet another day on August 25, 2016, after seeing two straight days of falls. Gold touched a four-week low of $1,321 on the day.

Miners that have high correlations to gold include Hecla Mining (HL), Kinross Gold (KGC), Eldorado Gold (EGO), and Alacer Gold (ASR). These four stocks have risen 273.1%, 187.9%, 43.1%, and 32.4%, respectively, on a year-to-date basis.

The correlation of AngloGold Ashanti with gold is at its highest among our four stocks. From its 55% correlation three years ago, it now has a YTD correlation of 57.1%.

Demands for gold and silver have risen this year due to the haven bids that followed the global unrest.

Gold rose once again on June 27, 2016, and closed at $1,324.7 per ounce. It also touched a low of $1,320.8 on the day.

Mining stocks, which have seen losses during the past few weeks due to the tumbling precious metal prices, rose on Friday.

On April 18, crude oil dropped by almost 7%, dragging down the equity markets. In Doha, a nascent freeze output deal by OPEC and non-OPEC producers fell apart on April 17, propping up crude prices.

Precious metals saw a down day on April 1, 2016. The fall in precious metals was led by the marginal rise in the US dollar.

The current 2016 rout in precious metals is most visible in platinum and palladium. Both these metals have seen a significant drop in 2016.

The US dollar, as measured by the US Dollar Index (DXY), rose 0.2% yesterday, whereas gold fell by 1% on the day.

Silver is an industrial metal, and the deficits could have easily buoyed silver and saved it from falling in 2015. But that wasn’t the case, and silver followed gold for its price direction.

The fall in the price of gold on Wednesday, December 30, 2015, may most likely be due to weaker oil prices. This weakness extends to the gold markets as well.

The further reduction of the import duty on gold may raise demand in Indian markets. The Asian market makes up almost 60% of the total demand for gold.

The most crucial factor keeping gold under its whip in the past year has been the liftoff of the federal interest rate by the US Federal Reserve.

A tightening move by the US comes as the rest of world loosens to improve economic activity. For example, the ECB recently eased its rates to pump up the economy.

Gold hit a six-year low in November, and the SPDR Gold Shares (GLD) fell at the same time. GLD has fallen about 6.8% in the month of November. It’s the biggest monthly fall since 2013.

With the interest rates rising above the zero level, the US dollar will become stronger compared with other world currencies.

The JPMorgan Latin America Fund Class A fell by 6.2% in September from August 2015. But from the end of September until October 28, the fund was up 5.2%.