uploads///MINER

How Are Mining Stocks Reacting in 2017?

By

Feb. 3 2017, Updated 9:07 a.m. ET

Mining companies regained

Donald Trump’s recent victory in the US presidential election on November 8, 2016, initially resulted in fear among precious metal investors. As these concerns subsided, precious metals and mining stocks slowly started falling. The rate hike phenomenon in December 2016 also played negatively for precious metals, and precious metals and their mining companies kept falling.

Some investors expected choppy markets for precious metal mining companies after Trump’s victory, but that didn’t happen. Miners are often known to follow precious metals. Most of the time, they move in the same direction.

On a YTD (year-to-date) basis, Newmont Mining (NEM), Gold Fileds (GFI), Agnico-Eagle Mines (AEM), Primero Mining (PPP) rose 0.9%, 13.1%, and 7.8%, respectively. Primero Mining (PPP), however, has seen a YTD loss of 3.9%. The VanEck Vectors Junior Gold Miners ETF (GDXJ) saw a YTD rise of 15.1%.

Article continues below advertisement

Technical indicators

The above four mining companies are trading close to their 100-day moving averages. However, they’re above their shorter-term, 20-day moving averages. Alamos is the only stock that’s below its 20-day moving average.

A substantial premium on a stock’s trading price suggests a potential fall in prices. A discount could indicate a rise in prices. Target prices for the above four mining companies are significantly higher than their current prices, which suggests a positive outlook.

An RSI (relative strength index) 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. Mining companies’ RSI readings are also slowly rising.

As of January 26, 2017, GDXJ’s RSI level was close to 52.8.The rate hike phenomenon in December 2016 also played negatively for precious metals,

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.