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Analyzing the Revivals in Precious Metals Miners

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Miners revived

The past week has brought a revival in mining stocks. In this part of the series, we’ll look at the technicals of mining stocks such as New Gold (NGD), Newmont Mining (NEM), Gold Fields (GFI), and Primero Mining (PPP).

The rising strength of the US dollar has been the predominant driver of the falls in precious metals mining stocks.

New Gold and Primero have seen year-to-date (or YTD) falls of 10.9% and 53.8%, respectively. New Gold and Gold Fields have seen YTD rises of 0.94% and 25.6%, respectively. The mining-based Sprott Gold Miners ETF (SGDM) is trading at a marginal YTD rise of 6.2%.

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Technicals

All four of the miners mentioned above are trading at premiums to their 20-day and 100-day moving averages, except for Primero Mining, which is trading at a discount to its 100-day moving average.  

A considerable premium over a stock’s price indicates a possible downside correction in its price, and a considerable discount to a stock’s price suggests a possible rise in its price. 

These miners’ target prices are reasonably higher than their current trading prices, except for Gold Fields, whose target price is lower than its current trading price. This difference suggests a negative outlook for Gold Fields. On the other hand, a stock’s target price’s being greater than its current price indicates a positive outlook.

The RSI levels of these miners have also revived. SGDM has an RSI of 58.7.

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