What Drove Mining Stocks on March 30?



Mining stocks fell

Concerns surrounding the Trump administration and its ability to deliver on election promises boosted precious metals and mining stocks. Over the past week, precious metals witnessed a sudden upswing due to the conundrum surrounding the failure of the healthcare bill to have the necessary votes to bring it to the House of Representatives. However, after that, precious metals slowly started dropping. The precious metal mining stocks had a choppy trading day on Thursday, March 30, 2017, due to the fall in metals.

On a YTD (year-to-date) basis, Alamos Gold (AGI), First Majestic Silver (AG), B2Gold (BTG), and Royal Gold (RGLD) have risen 17.4%, 3.5%, 18.9%, and 9.3%, respectively. These four miners witnessed losses on Thursday due to the fall in precious metals.

Consequently, the VanEck Vectors Junior Gold Miners ETF (GDXJ) also fell 1.2% on Thursday. However, it has risen 13.2% YTD.

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Technical indicators

Among the four mining stocks mentioned above, all are trading above their 100-day moving averages and considerably above their 20-day moving averages except First Majestic, which is at a discount to its 100-day moving average. A substantial premium on a stock’s trading price suggests a potential fall in price, while a discount could indicate a rise in price. 

Notably, the target prices of these four mining companies are significantly higher than their current prices, which suggests a positive outlook.

Low RSI levels

When an RSI (relative strength index) level is above 70, it indicates that a stock has been overbought and could fall. An RSI level below 30 indicates that a stock has been oversold and could rise. Mining companies’ RSI levels appear to be slowly rising. The RSI level for GDX is almost 53.


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