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Taking Gold's Pulse as May Nears Its End

PART:
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Taking Gold's Pulse as May Nears Its End PART 1 OF 5

How Are Mining Stocks Reacting as May Nears Its End?

Mining stocks react

Precious metals prices saw a sudden fall in mid-April 2017, along with precious metals mining stocks and funds. However, precious metals’ revival in the past week has benefited mining companies.

The recent unrest in the markets due to President Donald Trump’s trade commitments and other policies lifted the safe-haven bids for gold and other mining stocks.

How Are Mining Stocks Reacting as May Nears Its End?

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Alamos Gold (AGI), First Majestic Silver (AG), B2Gold (BTG), and Royal Gold (RGLD) have risen 16.5%, 4.2%, and 25.8%, respectively, so far in 2017. Alamos, however, has fallen 6.6% in the year. The VanEck Vectors Gold Miners ETF (GDX) has risen ~9.8% so far in 2017.

Technical indicators

The four miners mentioned above are all trading above their short-term 20-day moving averages except for Alamos Gold. A substantial premium on a stock suggests that its price could fall, while a discount suggests that its price could rise.

The target prices of all four of the mining stocks under review in this series are significantly higher than their current prices, indicating a positive outlook. However, when it comes to the 100-day moving average, a few miners are trading above it, and a few miners are trading below it.

RSI scores

When a stock’s RSI (relative strength index) score is above 70, it indicates that it has been overbought and could fall. However, an RSI score of below 30 indicates that a stock has been oversold and could rise. 

Mining companies’ RSI scores have risen considerably over the past week. GDX has an RSI of 71. Many miners, as shown above, have RSIs of above 70.

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