The Precious Metals Rout: Impact on Miners and ETFs
(Continued from Prior Part)
Current trading range for Platinum
Platinum prices dropped by 0.89% on the last trading day, touching $956. This is their lowest mark since January 2009. Critically low prices are raising concerns for miners. Platinum miners include Newmont Mining (NEM). NEM is down by 31.36% on a 30-day trailing basis. However, last trading day, it gained 0.15%. NEM represents 5.43% of the Market Vectors Gold Miners ETF’s (GDX) portfolio.
Below is a chart of COMEX platinum prices and volumes for the last month. As you can see, the volume and price have declined substantially in the past month.
Precious metals awaiting precious data
As we await the crucial data this week—the trade balance, PMI, unemployment rate, and non-farm employment—an upside or a downside swing for precious metal is equally likely. A much-awaited lift-off during the September FOMC meeting leaves us with more speculation as to the downside risk, affecting the US currency as well. Tapping the USD Index (DXY) for currency movements as a gold indicator is crucial. Last trading day, DXY rose by 1.09% on a five-day trailing basis.
Metal miners are affected
Among the most concerned parties when it comes to downside risks are the miner ETFs like the Market Vectors Gold Miners ETF (GDX) and the SPDR S&P Metals and Mining ETF (XME). Gold mining companies also await these valuable data releases for the US economy as well as precious metals. But the last trading day went well, and most mining companies saw an up day. Gold miners Agnico-Eagle Mines (AEM) and Harmony Gold Mining (HMY) gained close to 4.15%and 1.26%, respectively.
Silver prices also took a hit on Friday and followed the same route as gold. Silver for September delivery lost 1.42% on a five-day trailing basis. The last trading day was positive for gold and silver, as they gained 0.12% and 0.29%, respectively. Silver miners were negatively affected last month. Silver mining companies Hecla Mining (HL) and Silver Wheaton (SLW) lost 7.52% and 3.62%, respectively. AEM, HMY, HL, and SLW together represent 12.11% of the Market Vectors Gold Miners ETF’s (GDX) portfolio.
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