X
<

How Global Indicators Are Affecting Precious Metals

PART:
1 2 3 4
Part 2
How Global Indicators Are Affecting Precious Metals PART 2 OF 4

How Miners Correlate to Gold

Correlation analysis

As we analyze mining companies, a correlation study of the miners to gold is important. Gold is the most famous among the precious metals and is likely a price determinant of the directional move of silver, platinum, and palladium.

In this part of the series, we’ll analyze a few mining companies like Agnico Eagle Mines (AEM), Primero Mining (PPP), Silver Wheaton (SLW), and Franco Nevada (FNV).

How Miners Correlate to Gold

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

Receive e-mail alerts for new research on SIL

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.

Mining funds that have a strong relationship to precious metals are the Global X Silver Miners (SIL) and the VanEck Vectors Gold Miners (GDX). They have risen 6.1% and 12.7%, respectively, year-to-date.

Upward trends

Among the four miners that we’ve selected, Franco-Nevada has the lowest correlation with gold this year, while Agnico Eagle Mines and Primero Mining have higher correlations. Agnico, Silver Wheaton, and Franco-Nevada’s gold correlations have moved up over the past three years, while Alamos Gold’s correlation has fallen. Sibanye’s correlation has seen a mixed trend.

Franco-Nevada has a three-year correlation of 0.66 and a one-year correlation of 0.82. The correlation of 0.82 implies that ~82.0% of the time, Franco-Nevada has moved in the same direction as gold during the last one year.

A rise in correlation is an indicator that the price is more likely to track the directions of precious metals compared to equities in general.

X

Please select a profession that best describes you: