Analyzing Gold and Silver Cross-Commodity Rates

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Part 3
Analyzing Gold and Silver Cross-Commodity Rates PART 3 OF 4

Reaction of Mining Stocks after Precious Metals Rebound

Mining stocks react

Most mining stocks have seen brighter days during the last month, but the past week has been slow. As a result, many miners fell substantially due to the fall in precious metal prices. In this part of the series, we’ll analyze the performances of Barrick Gold (ABX), Kinross Gold (KGC), Eldorado Gold (EGO), and Iamgold (IAG).

Reaction of Mining Stocks after Precious Metals Rebound

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On a year-to-date basis, Barrick Gold, Kinross, and Iamgold have risen 2.4%, 36.7%, and 63.9%, respectively. However, Eldorado Gold fell 29.8% during the same time frame. The Sprott Gold Miners (SGDM) has risen 11.0% year-to-date.

Moving averages

Except for Eldorado, these miners are trading below their 20-day moving averages. Barrick and Eldorado are also trading below their 100-day moving averages. Kinross and Iamgold are trading slightly above their 100-day moving averages.

The importance of moving averages in this analysis is that a considerable premium over the longer-term moving averages could suggest a near-term downturn. However, a huge premium could be an indicator of a possible fall in 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, miners and their RSI (relative strength index) levels also fell. The RSI levels for ABX, KGC, EGO, and IAG are 18.4, 41.7, 59.4, and 38.8, respectively. 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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