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Miners Impacted by Market Tumult and Depressed Manufacturing Data

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Jan. 12 2016, Updated 6:15 a.m. ET

Mining stocks rise

The recent global market tumult had lifted up the prices of precious metals like gold and silver. However, the same market unrest and depressed manufacturing data from China put pressure on platinum and palladium and dragged them to multi-year lows. The stock market was also under pressure. However, the mining-based stocks saw some sunshine owing to the rise in gold and silver. Mining-based stocks like GoldCorp (GG), Sibanye Gold (SBGL), AngloGold Ashanti (AU), and Eldorado Gold (EGO) rose 8%, 7.7%, 11.3%, and 9.4%, respectively, on a trailing-five-day basis.

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100-day moving average price

The target price ranges by the expert analyst for all these stocks as mentioned above is significantly above their current trading prices. As observed earlier, about a month back, most of the mining companies were trading at a low share price, below their 100-day moving average price. However, the recent mining stock rises have brought the share prices above or close to the 100-day moving average. Substantial discounts on the 100-day moving average price denote the possibility of a rebound, and that recently surfaced.

GoldCorp is trading at a 3.3% discount from its 100-day moving average, whereas Eldorado is just trading the 100-day moving average mark. Sibanye Gold and AngloGold Ashanti are trading at respective 16% and 2.7% premiums from their 100-day moving average targets. All these four stocks are trading at a premium to their 20-day moving average price.

Together, these three companies contribute 18.3% to the price changes of the VanEck Vectors Gold Miners ETF (GDX). The GDX ETF surged 5.8% on a trailing-five-day basis. GDX too is trading above its crucial 100-day and 20-day moving average prices.

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