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Analyzing the Performances of the Giant Precious Metal Miners

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Miners’ volatilities

Undoubtedly, silver has outperformed gold this year. While gold has seen a year-to-date rise of 23%, silver has seen a rise of 34.4%. However, the past month wasn’t beneficial for either of these metals as fears of an interest rate hike intensified. Gold fell 3.7%, and silver fell 9%.

The Velocity Shares 3X Long Silver ETF (USLV) and the ETFS Physical Swiss Gold (SGOL) have fallen 26% and 3.4%, respectively, on a 30-day trailing basis.

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Let’s look now at the implied volatility figures of giant precious metal mining companies such as GoldCorp (GG), Newmont Mining (NEM), and Barrick Gold (ABX). These three mining stocks have call-implied volatilities of 43.8%, 41.3%, and 46.3%, respectively. Call-implied volatility measures the changes in an asset’s price with respect to the variations in the asset’s call option. During times of global and economic turbulence, volatility is higher than in a stagnant economy.

These three miners are among the top three mining stocks that make up the VanEck Vectors Gold Miners ETF (GDX).

RSI

The RSI (relative strength index) levels of mining shares, including the above three giant miners, have been falling considerably, and prices have slowly been retreating.

GoldCorp, Newmont, and Barrick Gold had RSI levels of 26.5, 32.0, and 237.0, respectively. An RSI level above 70 indicates that a stock has been overbought and could fall, while an RSI level below 30 indicates that a stock has been oversold and could rise.

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