X
<

Gold at 8-Week Low: What's Next?

PART:
1 2 3 4 5 6
Part 6
Gold at 8-Week Low: What's Next? PART 6 OF 6

What Are the Key Trends in Miners’ Correlations?

Mining shares and metals

When we read the price fluctuations for precious metals and mining stocks, it’s crucial to realize how closely these two are linked.

In this final part of our series, we’ll examine the correlations that Sibanye Gold (SBGL), Gold Fields (GFI), Yamana Gold (AUY), and Pan American Silver (PAAS) have with gold.

What Are the Key Trends in Miners&#8217; Correlations?

Interested in SBGL? Don't miss the next report.

Receive e-mail alerts for new research on SBGL

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Leveraged mining funds such as the Direxion Daily Gold Miners Bull 3X ETF (NUGT) and the Proshares Ultra Silver (AGQ) have high correlations with gold. These funds have fallen 14.2% and 5.3%, respectively, on a trailing five-day basis as of July 3, 2017.

Trends in correlation

Among the above four mining companies, Yamana has the highest correlation with gold, while Pan American has the lowest. Over the past three years, Yamana, Sibanye, and Gold Fields have seen upward correlations in their trends, while Pan American has seen a mixed trend in correlation.

A rise in correlation means that there’s an increased tendency of a particular miner to react according to changes in gold.

Yamana has a three-year correlation with gold of ~0.74 and a one-year correlation of ~0.80. The correlation of ~0.80 suggests that Yamana has moved in the same direction as gold about 80.0% of the time over the past year. Gold Fields saw its three-year correlation of 0.77 rise to a one-year correlation of 0.80.

But bear in mind that correlations can move in different directions at different times.

X

Please select a profession that best describes you: