Understanding Precious Metals and Cross-Commodity Rates

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Part 4
Understanding Precious Metals and Cross-Commodity Rates PART 4 OF 7

Inside Mining Stock Moving Averages This Week

Mining stocks react

Most mining stocks have seen brighter days over the past month, but the past week has been slow. As a result, many mining stocks fell substantially due to the fall in precious metal prices.

In this part of our series, we’ll analyze the performances of Barrick Gold (ABX), Cia De Minas Buenaventura (BVN), Kinross Gold (KGC), and Eldorado Gold (EGO).

Inside Mining Stock Moving Averages This Week

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On a YTD (year-to-date) basis, Barrick Gold, Cia De Minas, and Kinross have risen 3.8%, 18.4%, and 40.2%, respectively. However, Eldorado Gold fell 27% during the same period. The VanEck Vectors Gold Miners (GDX) has risen 13.9% YTD.

Moving averages

Except for Eldorado, these miners are trading below their 20-day moving averages and above their 100-day moving averages. Eldorado is trading below its 100-day moving average but above its 20-day moving average.

The importance of moving averages in this analysis is that a considerable premium over the longer-term moving average could suggest a near-term downturn. A huge premium could be an indicator of a possible fall in stock price.

The target prices of these four miners are significantly above their current trading prices. That trend could indicate a possible increase in price.

RSI levels

Due to the subsiding prices of precious metals during the past week, mining stocks and their RSI (relative strength index) levels also fell. The RSI levels for ABX, BVN, KGC, and EGO are now 21.8, 35.9, 37.8, and 62.1, respectively. Remember, an RSI level below 30 indicates a possible upward movement in price, while an RSI above 70 indicates the possibility of a downturn in price.


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