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Precious Metals Continue to Extend Losses

Meera Shawn

Gold Falls Again as Its Haven Appeal Falters

(Continued from Prior Part)

A year of price slash

The precious metals market has witnessed falling prices in November. Gold and silver have fallen 9.8% and 10%, respectively, on a year-to-date (or YTD) basis. Platinum and palladium, too, have fallen almost 30% each on the same basis.

These losses have had an impact on the mining industry. Falls in the Market Vectors Junior Gold Miners ETF (GDXJ) and the iShares Silver Trust ETF (SLV) have been 20.1% and 10.2%, respectively, on a YTD basis.

Major mining giants Barrick Gold (ABX), Newmont Mining (NEM), and GoldCorp (GG) have fallen 42.9%, 50.3%, and 43.8%, respectively, during the current year. These three companies make up 19.6% of the Market Vectors Gold Miners ETF (GDX). GDX alone has fallen a whopping 31.9% on a YTD basis.

LBMA wants reforms

Some other news for the precious metals markets is that the LBMA (London Bullion Market Association) is in the process of reforming the precious metals market. Improvements are believed to be aimed at increasing transparency and liquidity in the increasingly regulated precious metals market. On October 9, 2015, The LBMA issued an RFI (request for information) inviting suggestions for potential solutions.

Transparency could come in the form of trade-reporting standards that are similar to those of US Commitment of Traders Reports, mainly because they show weekly movements in long and short positions on COMEX.

More transparency may cause market participants to rely more on authorities. It could also lead to an increased number of participants. Another of its central aims could be to open a window for the over-the-counter markets.

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