Gauging Miner Reactions to the Latest Slump in Precious Metals
Precious metals had a down day on Thursday, June 29. In fact, June has been tough overall for these metals as well as for miners, whose profits and losses are often exaggerated by what happens with the metals themselves.
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The Sprott Gold Miners Fund (SGDM) has maintained a gain of 1.9% YTD, but all four mining companies above saw losses on Thursday, June 29.
The above four mining stocks (except New Gold) are trading below their short-term 20-day moving averages as well as their long-term 100-day moving averages. Remember, a considerable discount below a stock’s trading price suggests a possible upward correction, whereas a huge premium above a stock price can lead to a downward correction.
As the target prices of most miners, including the four we’re discussing here, are above their current trading prices, it indicates a positive outlook for prices in the near term.
That said, the RSI (relative strength index) scores of these miners have fallen considerably over the past few weeks. NGD, SBGL, GFI, and AEM now have RSI levels of 55.3, 33.5, 29.8, and 35.3, respectively. SGDM has an RSI level of 33.1.