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Gold Falls as Janet Yellen Indicates a Higher Interest Rate (Continued from Prior Part) Gold and interest rates
Gold prices have historically had a close relation to US real interest rates. As gold is a non-interest bearing asset, higher interest rates pull money into the Treasuries as cash flows lure investors. Gold, on the other hand, carries no intermediary cash flows, and investors are only hoping to earn by the price increase in gold. Thus, the looming fear of the Federal decision on a rate hike is playing its game on gold and other precious metal prices. Gold is now trading at its lowest mark seen since February 2010. The Federal decision of moving the rates above the zero mark for the first time in almost ten years is causing precious metals to lose their lustre.
Interest rates and the US dollar
Interest rates have a close to direct relation with currency. When a country raises its rates, money is expected to flow into the country by way of foreign investments. The new incoming money could raise the demand for the US dollar and thus pose a rise. The rising US dollar once again causes harm to the dollar-denominated assets and pushes its prices lower. Gold has posted an 11.6% loss on a year-to-date basis. Similarly, silver, platinum, and palladium have also lost 11.9%, 31.7%, and 33.8%, respectively, on a year-to-date basis.
The growing likelihood of the rate hike has caused money managers to cut their bullish position in gold-based funds drastically. Investors have dumped close to 400 tons of gold on COMEX. Some other ETFs that have posted losses in price in the current year include Global X Silver Miners ETF (SIL) and the Market Vectors Junior Gold Miners ETF (GDXJ). Mining companies that have seen plunging share prices include Centerra Gold (CG), Barrick Gold (ABX), and Coeur Mining (CDE). These three companies together contribute 8.8% to the Market Vectors Gold Miners ETF (GDX).
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PRODUCER |
CODE : CDE |
ISIN : US1921085049 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Coeur Mining is a silver and gold producing company based in United states of america. Coeur Mining produces silver, gold, copper, lead and zinc in Argentina, in Australia, in Bolivia, in Mexico and in USA, develops gold and silver in Argentina and in Bolivia, and holds various exploration projects in Mexico. Its main assets in production are ROCHESTER MINE - NEVADA PACKARD in USA, ENDEAVOR and BROKEN HILL in Australia, PALMAREJO in Mexico, MARTHA MINE in Argentina and SAN BARTOLOME in Bolivia, its main assets in development are ROCHESTER and KENSINGTON in Bolivia and JOAQUIN in Argentina and its main exploration properties are KENSINGTON/JUALIN in Argentina, LAKE VICTORIA GOLD BELT in Tanzania and EL REALITO, GUADALUPE and LA PATRIA in Mexico. Coeur Mining is listed in Canada, in Germany and in United States of America. Its market capitalisation is 5.5 billions as of today (€ 4.9 billions). Its stock quote reached its highest recent level on November 21, 1997 at 99.38, and its lowest recent point on January 22, 2016 at 1.62. Coeur Mining has 789 193 984 shares outstanding. |