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Palladium Looks Strong: What about the Other Precious Metals?

PART:
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Part 4
Palladium Looks Strong: What about the Other Precious Metals? PART 4 OF 6

How Are Mining Stock Technicals Moving?

Mining stock performances

When an investor considers parking money in precious metal mining stocks, there are a few technical points to keep in mind.

While there are quite a few indicators we could monitor, we’ll look at the 14-day RSI (relative strength index) scores and implied volatility.

How Are Mining Stock Technicals Moving?

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Precious metal–based funds such as the SPDR Gold Shares (GLD) and the iShares Silver Trust (SLV) are crucial when we look at the market. These two funds have fallen 0.88% and 1.9%, respectively, on a trailing five-day basis.

Call-implied volatility

Call-implied volatility measures changes in an asset’s price given variations in the price of its call option. Volatility is known to follow the overall market turbulence.

On June 9, 2017, the implied volatilities of AngloGold Ashanti (AU), Hecla Mining (HL), Kinross Gold (KGC), and Eldorado Gold (EGO) were 41.5%, 41.0%, 44.1%, and 50.2%, respectively.

RSI scores

A 14-day RSI score crossing the 70 level indicates that a stock may be a candidate for a downgrade. But a score below 30 indicates that the price of a stock could rise. RSI scores often follow the rises and falls of stocks.

AngloGold Ashanti, Hecla Mining, Kinross Gold, and Eldorado Gold have RSI scores of 55.5, 47.7, 53.7, and 30.8, respectively.

In the next part of this series, we’ll look at the moving averages of some of the other mining stocks.

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