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These Global Factors Are Affecting Gold

PART:
1 2 3 4 5
Part 4
These Global Factors Are Affecting Gold PART 4 OF 5

Mining Stocks Are Trading above Moving Averages

Mining stocks fell

Concerns surrounding Trump’s meeting with Xi Jinping have been affecting the market, and precious metals have been steady as they await the outcome on April 7, 2017. Over the past week, precious metals witnessed a sudden upswing due to the failure of the healthcare bill. This also gave a bullish kick to precious metal mining companies.

Mining Stocks Are Trading above Moving Averages

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On a YTD (year-to-date) basis, Sibanye Gold (SBGL), Gold Fields (GFI), Franco-Nevada (FNV), and Randgold Resources (GOLD) have risen 38.7%, 23.9%, 12.2%, and 16.8%, respectively. These four miners witnessed losses on Thursday due to the fall in precious metals. The VanEck Vectors Gold Miners ETF (GDX) has risen 12.2% YTD.

Technical indicators

Among the four mining stocks mentioned above, all are trading above their 100-day moving averages and considerably above their 20-day moving averages. A substantial premium on a stock’s trading price suggests a potential fall in price, while a discount could indicate a rise. 

Notably, the target prices of these four mining companies are significantly higher than their current prices, which suggests a positive outlook.

Low RSI levels

When an RSI (relative strength index) level is above 70, it indicates that a stock has been overbought and could fall. An RSI level below 30 indicates that a stock has been oversold and could rise. Mining companies’ RSI levels appear to be slowly rising. The RSI level for GDX is almost 60.

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