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What Led to the Slump in Precious Metals on October 2?

PART:
1 2 3 4 5
Part 4
What Led to the Slump in Precious Metals on October 2? PART 4 OF 5

Technical Analysis of 4 Mining Shares on Monday, October 2

Technical analysis

Aside from looking at the mining sector, it is also crucial to become familiar with technical indicators for mining shares. In this part of the series, we’ll look at the relative strength index and the call-implied volatility of these miners.

Mining stocks had a mixed reaction, as precious metals fell due to the slump in the dollar. In this article, we’ll look at Silver Wheaton (SLW), Randgold Resources (GOLD), AngloGold Ashanti (AU), and IamGold (IAG).

Technical Analysis of 4 Mining Shares on Monday, October 2

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Call-implied volatility

On October 2, 2017, Silver Wheaton, Randgold Resources, AngloGold Ashanti, and IamGold had implied volatility readings of 30.8%, 25%, 40.9%, and 44.3%, respectively. Call-implied volatility measures the fluctuations in the price of an asset given the changes in the price of the call option.

Relative strength index

The relative strength index (or RSI) shows whether a stock is overbought or oversold. If a stock’s RSI score is higher than 70, it may be overbought, leading the price to soon correct downward. If a stock’s RSI score is lower than 30, it could be oversold and may soon increase.

The above mining stocks’ RSI scores have recuperated recently. Silver Wheaton, Randgold Resources, AngloGold Ashanti, and IamGold have RSI scores of 26.0, 31.5, 40.2, and 32.8, respectively. The dropping RSI scores indicate that the shares’ prices could soon rise.

On October 2, the Sprott Gold Miners ETF (SGDM) and the VanEck Vectors Gold Miners ETF (GDX) rose 0.15% and 0.39%, respectively, despite the decline in precious metals.

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