ProShares VIX Short-Term Futures

During the past week, average hourly earnings, excluding the farming industry, were below analysts’ expectation of 0.10%.

One of the dominant financial trends of the past decade has been a move by investors out of actively managed funds and into passively managed index funds or exchange traded funds (ETFs).

Another critical factor that has been affecting the price movement of precious metals is overall market volatility.

During the week ended January 19, 2018, global markets trended higher despite the possibility of a US government shutdown. The potential shutdown pushed volatility up.

The Dow Jones Industrial Average appreciated ~1.6% for the week ended January 12, 2018, while the S&P 500 (SPY) returned ~1.3%. The tech-heavy NASDAQ (QQQ) posted a weekly gain of ~1.4%.

Every segment of the global financial markets began 2018 on a positive note. The global equity rally extended in the first week of the year.

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.

All four precious metals rose on Monday, October 30, as multiple speculations in the market gripped investors’ attention.

Ongoing worries in North Korea and political chaos in Washington have been crucial in boosting the prices of precious metals.

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.

All the four precious metals saw an up day on Monday, October 9, 2017.

North Korean tensions Like the US dollar, global tensions can be responsible for precious metal price fluctuations. North Korea has interpreted US president Donald Trump’s comments as a declaration of war, stating that Pyongyang has the right to take countermeasures, including shooting down US bombers outside of its airspace. The ongoing unrest in the Korean peninsula has led to a global […]

Precious metals have been buoyed by tension in North Korea. If North Korea does another missile test, it could prompt investors to move to haven assets such as gold, silver, Treasuries, and major currencies.

This week volatility (VXX) has continued to stick to its trend of sudden spikes and then dropping immediately.

The key reason for the debt ceiling deal was to approve aid to Hurricane Harvey victims. A US government shutdown could have adversely impacted relief operations.

The US Federal Open Market Committee (or FOMC) is scheduled to meet on September 19 and 20 to discuss the current economic climate in the US and to decide whether any monetary policy adjustments are necessary.

Precious metals have maintained upward movement over the past month as geopolitical tensions hover.

The governing council of the European Central Bank (or ECB) is scheduled to meet on September 7 in Frankfurt, Germany. The meeting will be followed by a press conference.

August was a volatile month, filled with economic, political, and geopolitical uncertainty. September could turn out to be another nail-biter for the financial markets.

Gold futures for September expiration have risen ~3.9% over the past one-month period. Silver, platinum, and palladium have followed the same track as gold.

Renewed tensions arising out of North Korea’s missile launch on Tuesday had a major impact on volatility. Asian markets have declined more than 1% as risk aversion dominated markets.

In this cycle of expansion after the great recession, the Fed has started the process of monetary tightening.

The last two weeks have been eventful for financial markets (SPY).

Equity markets in the US and across the globe reported heavy losses as risk aversion set in.

Some companies benefit in times of uncertainty, and some sectors provide cover for investors.

Gold has fallen below $1,300 per ounce and broken below the longer-term trend line that had been established this year.

What about the impact on interest rates? Here again, there is no consistent relationship between spending and interest rates.