Tuesday, February 13, 2018

After week of market chaos, gold regains part of their losses and the dollar continues trend back down

In the midst of a market selloff or correction, fundamentals and technicals usually go out the window.  And this is especially true when most of the losses are tied specially to the actions of one or two securities (VIX and XIV),

So with this in mind in the aftermath of last week's turmoil and chaos in the market, we appear to be returning back to the trends that have been occurring since 2017 which include gold prices moving higher, and the dollar continuing its trek lower.

Gold futures finished higher on Monday, taking their cue from a weakening U.S. dollar to recoup roughly half of what they lost last week. The updraft came even as global stocks were rebounding from their worst weekly rout in two years and as bond yields resumed a steady ascent. 
April gold GCJ8, +0.17% rose $10.70, or 0.8%, to settle at $1,326.40 an ounce, logging the biggest one-day dollar and percentage gain since Jan. 24, according to FactSet data. The gold-backed exchange-traded fund, SPDR Gold Shares, climbed by 0.7%. Prices lost 1.6% last week, the largest weekly loss in two months, as investors were unsettled by renewed volatility in stocks amid fears about rising bond yields and inflation. 
March silver SIH8, -0.12%  added 43.1 cents, or 2.7%, to $16.57 an ounce, while the silver-focused iShares Silver Trust SLV, +0.47%  rose 1.7%. 
Last week “traders booked profits in gold long positions to meet margin money calls on equity investments. Gold fell as a result,” said Chintan Karnani, chief market analyst at Insignia Consultants. 
“Stability on global stock markets will be positive for gold,” he said. “Investors will hedge in gold to counter stock market volatility whenever there is less need for margin calls on stock market investment.” – Market Watch


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