On Jan. 13, gold for immediate delivery closed down per troy ounce on the London Bullion Market, breaking the uptrend that was characterizing week two of the new year.
Gold for immediate delivery closed at $1,190.35 per troy ounce, on Jan. 13 on the London Bullion Market, down $14.70 per troy ounce from the previous day’s close ($1,205.05 per troy ounce).
At 10 a.m. the precious metal closed at $1,196.35 per troy ounce, down $10.30 per troy ounce
from the previous day morning’s close ($1,206.65) and down $8.70 from the previous day afternoon’s close ($1,205.05 per troy ounce).
Source: Kitco.com
Before its retracement to Friday’s level, gold had a significant jump during week two of 2017. It was up $28.95 per troy ounce, from $1,176.10 on Jan. 9 to $1,205.05 on Jan. 12.
On the Comex, gold futures for February closed at $1,197.30 per troy ounce on Jan. 13, down $2.50 from the previous trading day.
Also on the market of the futures, gold closed down a second week when we have observed an uptrend in the price of the contracts, from $1,183.50 per ounce on Jan. 9, to $1,198.90 per ounce on Jan. 12.Ă‚
Friday’s dip in the price of the contracts is eight out of a total of 24 changes, signaling that gold is trending up on the Comex since Dec. 14. Over this timeframe, the highest price was $1,204.30 and the lowest price was $1,123.90, a difference of $80.40 per ounce or a 3.34% change. The average price per ounce over the period is $1,155.22 per ounce.
There is no doubt that up trending in the price of gold for immediate delivery and in the price of the futures was led by the fact that Donald Trump fell short on investors’ expectations about an update on his government’s economic and fiscal policy objectives. During the second week of January, we also observed a devaluation of the U.S. dollar towards the other currencies measured by the U.S. Dollar Index (DXY) that on Jan. 13 closed at $101.19, down 16 cents from the previous close. Friday’s dip has been the fourth negative change out of a total of six changes in the index.
Source: Investing.com
Following the uptrend in the underlying precious metal, the gold stock industry gained 9% year to date and 1% over week two of 2017, as shown by the VanEck Vectors Gold Miners (GDX), one of the most followed indexes that represents the gold mining industry as a whole.
Among the biggest gold producers, Goldcorp Inc. (GG, Financial) leads the group with 4% increase year to date, followed by Barrick Gold Corporation (ABX, Financial) with 3% and Kinross Gold Corp. (KGC, Financial) with 2%, while Newmont Mining Corporation is flat.
Iamgold (IAG, Financial) leads to group of mid-tier gold mining companies with a 7% gain year to date, followed by Yamana Gold (AUY, Financial) up 6% and Eldorado Gold Corp. (EGO, Financial) up 2%.
Source of data: Yahoo Finance
As shown by the table above, Yamana Gold and Kinross Gold Corp. seem to be the cheapest gold stocks of the observed group when both P/B ratio and EV/Ebitda ratio are considered.
Disclosure: I have no positions in any securities mentioned in this article.
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