Precious Metals Traded below Their 100-Day Moving Average Prices
Performance of Precious Metals in November 2015
100-day moving average price
Gold has dramatically lost its shine in the last month, and not even the geopolitical tensions in Russia and Turkey could help boost its value. The primary reason behind gold’s persistent downward trend is the much-anticipated Federal Reserve meeting in December.
Investors expect that some sort of rate hike may occur, and gold’s price trend may already have taken a rate hike into account. With a fall of almost 9.9% in gold on a year-to-date basis, there may be less space for a downward move. Gold touched its five-year low price of $1,051 per ounce at the end of November. Gold is currently trading well below its 100-day moving average price of $1,122 per ounce.
Other precious metals
In addition to gold’s subdued pricing, other precious metals like silver, platinum, and palladium are trading far below their 100-day moving average prices. Silver is currently trading at $14.08 per ounce, and its 100-day moving average price is $15.02. Platinum is trading at $826 per ounce, and its 100-day moving average price is $965 per ounce. Palladium is currently priced at $543.20 per ounce, and its 100-day moving average price is $621 per ounce.
The question remains whether a pullback in these prices is expected or whether the December 16 Fed meeting could put more downward pressure on precious metals.
For the fourth straight week, money managers who hold net long positions in US currency are cutting their long positions on gold. The strong US dollar adversely affects the ETFs backed by precious metals.
Among the mining companies that seem to be comparatively underpriced against their 100-day moving average prices are Goldcorp Inc. (GG), New Gold Inc. (NGD), Sibanye Gold (SBGL), and Gold Fields Inc. (GFI). These four companies together contribute 15.8% to the Market Vectors Gold Miners ETF (GDX).
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