Changes in US stocks | Gold and silver stocks generally fall, Hekla Mining (HL.US) falls by more than 5%

The Zhitong Finance App learned that on Thursday, gold and silver stocks generally fell. Hecla Mining (HL.US) fell more than 5%, First Majestic Silver (AG.US) and Endeavour Silver (EXK.US) fell more than 4%, and Cordelan Mining (CDE.US), Pan American Silver (PAAS.US), and Goldfield (GFI.US) fell more than 2%. According to the news, spot silver plummeted by more than 4% and is now reported at $74.48; spot gold fell 0.5% and is now reported at $4433.37. The precious metals market is experiencing a liquidity shock caused by index rebalancing.

This round of adjustments in the precious metals market is directly linked to the annual weight rebalancing of the Bloomberg Commodity Index (BCOM). The mechanism was launched after the January 8 market and will continue until the 14th. The adjustment lowered the weight of gold from 20.4% to 14.9%, and the weight of silver was drastically reduced from 9.6% to 3.94%, forcing passive funds tracking the index to make mechanical position adjustments.

Deutsche Bank analyst Michael Hsueh pointed out that “it is bad for precious metals and good for crude oil.” Based on the size of open positions, silver will be under the greatest rebalancing selling pressure, followed by aluminum and gold. According to Michael Hsueh's estimates, the 2.4 million oz sell-off could cause the price of gold to drop by 2.5%-3.0%, depending on the ETF sensitivity model and time window adopted.