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Insights into Silver's 2017 and How the Dollar Compares

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Part 8
Insights into Silver's 2017 and How the Dollar Compares PART 8 OF 8

How Miners Have Weathered the Slide in Precious Metals

Mining stocks react

Precious metals have witnessed sudden and considerable downswings in their prices since mid-April 2017. Consequently, the falls in the prices of gold and precious metals have caused falls in precious metals mining stocks and funds.

Investors remain concerned about the potential impact of any further interest rate hikes the Federal Reserve may pursue on precious metals and mining stocks.

How Miners Have Weathered the Slide in Precious Metals

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On a YTD (year-to-date) basis, Royal Gold (RGLD), Goldcorp (GG), Sibanye Gold (SBGL), and Gold Fields (GFI) have risen 10.7%, 0.81%, 7.9%, and 4.3%, respectively.

Meanwhile, the VanEck Vectors Gold Miners ETF (GDX) is trading at a YTD rise of 3%. During the past month, many miners have experienced falls in their prices.

Technical indicators

The four miners mentioned above are trading below their short-term 20-day moving averages and their long-term 100-day moving averages. A substantial premium on a stock’s price suggests a potential fall in its price, while a discount could indicate a rise in its price. 

The target prices of all four of these mining stocks are significantly higher than their current prices, suggesting a positive outlook.

RSI levels

Remember, when an RSI (relative strength index) is above 70, it indicates that a stock has been overbought and could fall. However, an RSI of below 30 indicates that a stock has been oversold and could rise. Mining companies’ RSIs appear to be slowly rising.

GDXJ’s RSI is almost 23. Such a low RSI level suggests that a rise in the fund’s price could be on the horizon. 

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