How the Precious Metals Have Reacted to a Possible Rate Hike
Silver: the worst performer of the precious metals
Friday, December 11, 2015, was a good day for gold and palladium among the precious metals. However, platinum and silver fell 1.4% and 1.6%, respectively. The week was negative for the precious metals, which has been a trend over the last month. Silver was the worst performer among the precious metals last week, falling 4.4%. Silver closed below $14 on Friday and touched a low of $13.7. However, the trading volumes in silver have been astounding. It seems that investors are raising their bets in the bullion market ahead of the Fed’s long-awaited rate decision. The graph below shows the midweek performance of silver.
Platinum and palladium
The losses in the precious metals have hurt their YTD (year-to-date) performance. Platinum traded in the range of $825–$875 last week, and palladium traded in the range of $530–$550. These price figures are significantly lower than the quotes at the start of 2015. Platinum and palladium have fallen 30.7% and 31.8%, respectively, on a YTD basis.
Mining sector
The past month has seen a mixed performance in the mining industry. The Sprott Gold Miners ETF (SGDM) has risen 6.8% on a trailing-30-day basis, but the SPDR S&P Metals and Mining ETF (XME) has fallen 4.4%.
Mining companies have seen positive returns on their share prices. The top performers on a trailing-30-day basis include Sibanye Gold Corporation (SBGL), First Majestic Silver Corporation (AG), and Kinross Gold Corporation (KGC). These three companies together make up 6.2% of the Market Vectors Gold Miners ETF (GDX). GDX has also risen 6.8% on a trailing-30-day basis.
Browse this series on Market Realist: