Gold Prices Fall Again as Janet Yellen Suggests a 2015 Rate Hike
(Continued from Prior Part)
Uncertainty buoys bullions
With rising uncertainty in the global markets, gold prices have risen. Gold futures rose in the past two months, recovering from the July rout. Gold traded in the range of $1,127 to $1,147 per ounce on Monday, September 28, declining 1.21% and closing at $1,131 per ounce. Silver saw a steep decline of 3.79% and closed at $14.53 per ounce on Monday. Concerns over platinum persist, and it fell by 3.03%, which is less than the start of the week’s declines. It closed at $922 per ounce on September 28. palladium fell 2.36% and settled at $651 per ounce on Monday.
Below is a price chart of gold and silver price movements for September.
Tracking mining stocks
Precious metals mining stocks like Pan American Silver (PAAS), New Gold (NGD), and AngloGold Ashanti (AGI) have seen a rise in their share prices as bullion prices rose. These three stocks make up 8.2% of the Market Vectors Gold Miners ETF (GDX). The changes in precious metals prices also affect the SPDR Gold Shares ETF (GLD).
Money managers’ interest
According to the US CFTC (Commodity Futures Trading Commission) data released three days after the FOMC policy-setting meeting, the net long position more than tripled to 21,525 contracts in gold futures and options. Options trading showed commodity market bears may be active.
The put-to-call ratio for SPDR Gold Shares (GLD) fell last week to its lowest since 2012. The put-call ratio is a market sentiment indicator. A higher ratio indicates a higher proportion of put investors compared to the call. A higher put-call ratio is a likely bear market indicator. As of September 24, holdings in exchange-traded funds backed by gold increased by 5.9 metric tons since the Federal decision of delaying the rise of interest rates.
Money managers and hedge funds have increased their net long positions in gold by the most since last month, after the Federal Reserve’s decision on September 17 to hold US interest rates at the current close-to-zero level.
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