With the rally in precious metals, precious metal mining stocks benefited the most. Among the miners, the South-African miners outperformed. The depreciating rand helped the miners lower the costs. This helped their profit margins.
Sibanye Gold (SBGL) is a South African giant. It gained 156.5% during the past three months. It has a year-to-date gain of 122%. Other mining stocks like Silver Wheaton (SLW), Yamana Gold (AUY), and Coeur Mining (CDE) also rose by 17.5%, 29.1%, and 38.7%, respectively, during the past three months.
However, precious metals fell on February 26, 2016. Most of the mining stock had a down day—including the four companies mentioned above. Sibanye Gold, Silver Wheaton, Yamana Gold, and Coeur Mining fell by 1.6%, 2.9%, 2.2%, and 1.1%, respectively, on February 26. Together, these four companies account for 12.8% of the price changes in the VanEck Vectors Gold Miners ETF (GDX). GDX also had a down day. It fell by 3.6%. However, GDX rose by 35.8% during the past three months.
The trading prices of Sibanye Gold, Silver Wheaton, Yamana Gold, and Coeur Mining are at 83.4%, 17.2%, 29.7%, and 12.1% premiums from their 100-day moving average prices. The trading prices are also at a significant premium from the recent 20-day moving average prices. These figures could suggest a possible pullback. However, the movement in precious metals is watched closely for directional moves.
The best target prices for these miners are significantly higher than the current trading ranges. This suggests positive sentiment.
For Sibanye Gold and Coeur Mining, the RSI (relative strength index) is at 70. For Silver Wheaton and Yamana Gold, the RSI is at 64 and 65, respectively. RSI levels above 70 indicate possible overvaluation. Investors should watch precious metal price fluctuations closely before making decisions on their mining investments.