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Insight: Gold Rebounds after a Bloodbath (Continued from Prior Part) DXY and commodities
The DXY currency index prices the US dollar against six major world currencies including the Canadian dollar, Euro, pound sterling, Japanese yen, Swedish krona, and Swiss franc. On Friday, November 20, 2015, the US dollar gained by a whopping 0.58% against the other currencies. The rise in the dollar was likely backed by the preparations of the December rate hike that now seems to be on the cards. Precious metal markets have been impacted as well. Gold fell 0.17% and closed at $1076.3 a troy ounce. Silver too 0.89% and settled at $14.10 per troy ounce.
The rising US dollar puts downward pressure on dollar-denominated commodities. Significant price changes in the US dollar are most likely to provoke changes in dollar-denominated assets like gold and silver. You can see a historical price chart of gold and the US dollar above. Both are known to have an almost inverse relationship, especially in the longer term.
Fed eyeing a liftoff
It seems like precious metals and the ETFs that are linked to them, such as the Global X Uranium ETF (URA) and the Market Vectors Junior Gold Miners ETF (GDXJ), follow the Fed’s stance on its October meeting, and are preparing for a liftoff. The severe plunge witnessed in these ETFs and the precious metals they are linked to signals that the precious metal markets are ready for the rate hike move. The rise in the rates is almost priced in the precious metals now.
Gold is expected to suffer as an investment class once Treasuries have higher returns owing to the rate hike. Investors may flock to Treasuries, deserting precious metals, and this could lead to further falls in prices. The higher physical demands from the East seem unable to buoy precious metals in the current scenario.
The mining equities that have witnessed a fall in their prices include IamGold (IAG), AngloGold Ashanti (AU), and Hecla Mining (HL). These three companies contribute 6.8% to the price changes in the Market Vectors Gold Miners ETF (GDX).
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PRODUCER |
CODE : AU |
ISIN : US0351282068 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
AngloGold is a gold producing company based in . AngloGold produces gold, copper, silver and zinc in Argentina, in Australia, in Brazil, in Canada, in Ghana, in Guinea, in Mali, in Namibia, in South Africa and in Tanzania, develops gold and iron in Australia, in Brazil, in Colombia, in Congo Dem. Rep. of and in South Africa, and holds various exploration projects in Philippines. Its main assets in production are CRIXÁS, MINERAÇÃO, SAO BENTO, ANGLOGOLD ASHANTI MINERAÇAO and CRIXAS MINE in Brazil, SUNRISE DAM GOLD MINE in Australia, NAVACHAB MINE and NAVACHAB in Namibia, YATELA, MORILA and SADIOLA in Mali, CERRO VANGUARDIA in Argentina, MPONENG (WESTERN DEEP NO. 1 SHAFT), TAUTONA (WESTERN DEEP NO.3 SHAFT), BAMBANANI, TAU LEKOA, MPONENG, SAVUKA, TAU TONA, GREAT NOLIGWA, KOPANANG and CRIPPLE CREEK & VICTOR (CRESSON MINE) in South Africa, SIGUIRI in Guinea, TEBEREBIE, IDUAPRIEM, OBUASI and KUBI in Ghana, GEITA in Tanzania and TROUT LAKE MINE and CALLINAN MINE in Canada, its main assets in development are MOAB KHOTSONG in South Africa, MINAS-RIO in Brazil, LA COLOSA and GRAMALOTE in Colombia, KIBALI (KILO-MOTO) in Congo Dem. Rep. of and TROPICANA in Australia and its main exploration properties are HUALATAN and ER in Peru, MKURUMU in Tanzania, 777 PROJECT and RIVARD in Canada, LOUBOUGOULA, GOODPASTER and ALAMOUTALA (SADIOLA II) in Mali, BAMBADJI in Senegal, MORRO VELHO in Brazil and SIANA in Philippines. AngloGold is listed in Australia, in Germany and in United States of America. Its market capitalisation is US$ 9.6 billions as of today (€ 9.0 billions). Its stock quote reached its lowest recent point on November 23, 2018 at US$ 10.00, and its highest recent level on April 26, 2024 at US$ 23.52. AngloGold has 409 109 984 shares outstanding. |