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

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

Why Most Precious Metal Miners Plummeted on July 3

Monday’s tumble

Precious metals saw a down day on Monday, July 3, 2017, as the equity markets experienced a rebound and the US dollar stood firm. The falls for gold, silver, and platinum were negative for most mining shares. Let’s take a look at Alamos Gold (AGI), First Majestic Silver (AG), B2Gold (BTG), and Royal Gold (RGLD).

AGI, BTG, and RGLD continue to have YTD (year-to-date) gains of 0.73%, 16.5%, and 21.7%, respectively. AG, however, has a YTD loss of 0.66%.

Why Most Precious Metal Miners Plummeted on July 3

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The silver-based mining fund Global X Silver Miners ETF (SIL) has a YTD rise of 2.8%.

Technical analysis of miners

The above four mining stocks are trading below their short-term, 20-day moving averages. All these miners, except Royal Gold, are also trading below their long-term, 100-day moving averages. Remember that a substantial discount below a stock’s trading price suggests a possible upward correction in price, while a huge premium above the stock price can lead to a downward correction in price.

Since the target prices of most miners, including the four we’re covering 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. AGI, AG, BTG, and RGLD have RSI levels of 40.8, 37.0, 49.2, and 45.7, respectively. SIL has an RSI of 34.3.


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