Mining Stocks Gave Mixed Reactions to Global Tensions



Mixed reaction from miners

On Tuesday, January 5, mining companies gave a mixed reaction to the continued rise in precious metals. After surging almost 1.4% on Monday, January 4, gold gave a marginal rise by 0.3% to close at $1,078.4 per ounce. The biggest gainers on Tuesday include stocks like Primero Mining (PPP) and Sibanye Gold (SBGL). These stocks surged 3.5% and 3.4% to close at $2.35 and $6.37, respectively. The biggest losers include Coeur Mining (CDE) and Aurico Gold (AUQ). These two stocks fell 3.6% and 2.8%, respectively. These four stocks together make up 4.4% of the VanEck Vectors Gold Miners ETF (GDX).

The Direxion Daily Gold Miners (NUGT) lost 1.5% while leveraged Proshares Ultra Silver (AGQ) gained 1.9% on Tuesday.

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According to Bloomberg sources, a survey from the past ten years shows that January has been a strong month for gold with a 4.4% average rise in gold prices. The global tensions seem to the buoying factor for gold under the current scenario. The volatile equities market is another crucial determinant of gold’s prices.

Moving averages

The US dollar, measured by the DXY Currency, saw a rise of 0.06% on Tuesday, gaining about 0.84% since the start of the year. The increase in the price of gold has helped it cross the 20-day moving average price. However, it is still trading at a 3.1% discount from its 100-day moving average price. This likely suggests that further unrest in the markets can keep pushing gold prices. Miners may also see some relief in 2016 as compared to the carnage they saw in 2015.


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