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In What Direction Are Precious Metals and Miners Moving?

PART:
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Part 5
In What Direction Are Precious Metals and Miners Moving? PART 5 OF 5

How Mining Stocks Are Trading

Mining stocks react

Precious metals saw a sudden upswing in their prices due to geopolitical unrest in Syria and North Korea. Consequently, precious metal mining stocks and funds rose. Meanwhile, investors remain concerned about the potential impact of any further interest rate hikes that the Fed may pursue.

On a YTD (year-to-date) basis, Sibanye Gold (SBGL), Gold Fields (GFI), and Agnico Eagle (AEM) have risen 46.7%, 33.6%, 11.3%, and 20.8%, respectively. Primero Mining (PPP) has fallen 21.8% YTD. The VanEck Vectors Junior Gold Miners ETF (GDXJ) has risen 14.5% YTD. Last month, many miners saw their prices fall.

How Mining Stocks Are Trading

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Technical indicators

As of April 17, most of the aforementioned miners were trading above their short-term 20-day moving averages and their long-term 100-day moving averages. Primero was trading at a discount to its 100-day moving average.

A substantial premium on a stock’s trading price suggests a potential fall in prices, while a discount could indicate a possible rise in prices. The target prices of all four of these mining stocks are significantly higher than their current prices, which suggests a positive outlook. It seems likely that the global tumult could fare well for some miners in terms of haven bids. Gold Fields’ target price is below its current price, suggesting that its prices could fall.

RSI scores

When an RSI (relative strength index) score is above 70, it indicates that a stock has been overbought and could fall. However, an RSI score below 30 indicates that a stock has been oversold and could rise. Mining companies’ RSI scores appear to be slowly increasing. GDXJ’s RSI score is now almost 44.3.

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