All four precious metals except palladium witnessed an up day on December 18, 2017. Platinum touched the day’s high of $915.3 and ended up at $913.2 per ounce.
Precious metals and miners saw some relief on December 13 after the Fed raised rates as expected. Sibanye Gold (SBGL), Aurico Gold (AUQ), and Goldcorp (GG) rose 3.5%, 3.6%, and 5.8%, respectively.
The US dollar has fallen almost 9.1% on a YTD basis. The iShares Gold Trust (IAU) and the iShares Silver Trust (SLV) have risen 11% and 2.8%, respectively.
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.
Besides the impact of interest rates, there are also other global indicators that could play on precious metals—the most important being the US dollar.
Gold fell for the third consecutive day on October 18, 2017, as the US dollar regained strength. However, October 19 was an up day for gold and silver.
Haven or not? While gold (IAU) (SLV) has an inverse relationship with the dollar, stock markets also have a deep connection to the metal. Investors commonly perceive gold as a haven in the event of a severe stock market downturn. Presumably, when we experience a global market decline, stocks and currencies move downward. Riskier assets become […]
Besides the dollar changes, investors are also closely watching the ongoing Federal Reserve Open Market Committee or FOMC meeting for a directional change in precious metals.
Precious metal movement The four main precious metals saw their prices rise on September 7, 2017. The month has been beneficial for the metals due to rising market risk. Gold futures for October expiration rose almost 0.85% on Thursday to $1,351.60, closing at $1,346.50 per ounce. The price of gold was steady on Thursday after falling the […]
Precious metals saw an up-day on July 20, 2017, after Mario Draghi said that policymakers would discuss potential changes in the bond-buying program in autumn.
Precious metals increased as gold futures for July expiration rose 0.78% and closed at $1,273.6 per ounce. Platinum and palladium were in line with gold.
US dollar drops Besides geopolitical news, another important factor that has contributed to the rise of gold is the fall of the US dollar. The US dollar (UUP), depicted by the US dollar index, or DXY, dropped 0.27% on April 17 after hitting close to a four-week high on April 10. The DXY had fallen 1.9% […]
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.
Gold enthusiasts seem to be in a fix, as any further movements in the precious metal are currently unclear. The world famous SPDR Gold Shares ETF has risen ~11% in 2017 so far.
Gold has fallen more than $120 from its peak on November 9, 2016, following the US elections. The fall suggests optimism for a potential interest rate hike.
The gold-palladium spread has seen its ups and downs over the past few months. But the United Kingdom’s Brexit vote resulted in some strength for palladium.
COMEX non-commercial gold futures contracts, traded by large speculators and hedge funds, totaled 292,000 in the data reported through September 27, 2016.
Deutsche Bank’s price slumped to a record low after Bloomberg reported that trading clients had withdrawn their excess cash and positions from the lender.
Gold remained in the neutral range of $1,313–$1,319 per ounce as Bank of Japan gave its verdict, keeping the benchmark interest rate unchanged at -0.1%.
On Wednesday, May 25, gold continued its slide for the sixth-straight day. Gold has now shed 2.1% on a five-day-trailing basis and reached a seven-week low.
Gold gave steady returns to investors for the first two months of 2016 as unrest and instability continued in the markets. However, March started with some ups as well as downs for gold.
Gold and the dollar have a close inverse relationship. As precious metals are priced in greenbacks, the rising dollar often curbs the appeal of such assets.
Oil futures rose 9% on Friday, January 22, 216. Oil had plummeted to its 12-year low during the previous week. Risk aversion among investors rightly triggered the haven appeal, which led to a rise in the price of gold.
The instability in precious metals has been a victim of the rattled global markets. Gold and silver generally rise on days when stocks fall, and they pulled back on days when equities rebounded.
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.
Inflation and gold have a long-sought relation with each other. Investors perceive gold as a hedge against rising inflation. This may not hold in the short run.
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.
Janet Yellen suggested that the US economy is on track for recovery since the financial crisis of 2008 and that inflation expectations also looked firmer.
The Fed rate hike has been a major driver for gold prices since mid-2015. Higher interest rates usually diminish gold’s appeal due to its non–interest yielding nature.
The population of India doesn’t seem to appreciate the Indian government’s well-planned gold monetization scheme. The response to the scheme has been fairly muted.
The Indian government is aiming to improve the balance of payment by slashing gold imports. Its gold-hoarding behavior has impacted the current reserves, adding to the country’s deficit.
Platinum closed 0.67% lower on November 24, the only precious metal ending the day on a down note. Platinum settled at $841.70 an ounce, its lowest closing in almost ten years.
After the $5 billion stock market collapse in China, investors fled to gold. Even a third straight annual decline in prices has failed to make gold lusterless in China.
since 2013, gold supply in China has been thousands of tons more than what consultancy firms like the World Gold Council disclose as Chinese gold demand.
Gold demand in China saw a rise in 3Q15. However, the demand was small enough that its position as the leader in demand for gold was overtaken by India.
Gold futures for December delivery trading on COMEX rose on Wednesday. They touched a high of $1,183.10 per ounce. It’s the highest level in about a week.
The CPI measures the price paid by consumers for a basket of consumer goods and services. Real interest rates have been turning positive as inflation remains low and yields are increasing.
Eldorado Gold (EGO) is based in Vancouver. It had to temporarily stop its mining activities at Skouries and part of its operations in Olympiada, Greece.
According to the World Gold Council, 2Q15’s gold demand plummeted by 12% since 2Q14. The demand stands at 914.9 tons for 2Q15, a six-year low, as demand in 2Q14 stood at 1,038 tons.
Precious metals are taking the lead. The gold for August delivery was the most actively traded contract on July 20. It fell 2.20% and closed at $1,106.80 per ounce.
Flight-to-quality amid Greek debt renegotiations and the Chinese equity market slump has led investors to safe-haven assets, including the US dollar (UUP) and the Japanese yen.
Gold prices have an inverse relationship with real interest rates. As a result, decreasing real interest rates are positive for gold prices and gold-backed ETFs.
A strong US dollar is negative for gold, and vice versa. When the Fed didn’t provide a clear timeline for a rate hike, the US dollar and gold prices inched up.
The Alamos-AuRico merger rationale is to create a significant mid-tier producer that can withstand the ongoing low gold prices. Cost synergies will help lower costs.
Many intermediate and senior gold producers have declining production profiles. Mergers and acquisitions are thus expected to pick up in the coming months and quarters.
The US Dollar Index measures the US dollar’s strength against a basket of six major currencies. It was up by 2% in the last five sessions. It ended at 97.02 on May 28.
Gold mainly trades in the US dollar. As a result, a weaker dollar makes gold cheaper for other nations to purchase and it increases the demand for gold.
Lower inflation expectation is negative for gold since it’s considered an inflation hedge. But inflation below the Fed’s expectation could be positive for gold.
