Miners rebounded

Mining stocks saw mixed performances as the direction of precious metals remained unclear on July 19, 2017. While gold was almost flat, silver rose marginally, and platinum and palladium both saw down days.

In this part of the series, we’ll discuss the technicals of mining stocks Eldorado Gold (EGO), Alacer Gold (ASR), IAMGOLD (IAG), and Harmony Gold (HMY).

How Closely Are Miners Tracking Precious Metals?

Overall, fluctuations in precious metals are crucial determinants of mining stocks’ performances.

On a year-to-date (or YTD) basis, EGO, ASR, and HMY fell 22.7%, 10.7%, and 20.8%, respectively, on July 19. In contrast, IAG rose almost 34% on the day. The VanEck Vectors Junior Gold Miners ETF (GDXJ) was trading at a marginal YTD fall of 4% on the day.

Miners’ technicals

All four of these miners were trading below their long-term 100-day moving averages except for IAMGOLD. Eldorado and Alacer were also trading below their 20-day moving averages.   

The target prices of these miners remain significantly higher than their current trading prices, suggesting positive outlooks for the associated precious metals.

The RSI (relative strength index) levels of these mining stocks have improved over the past week due to the reversal in precious metals prices. GDXJ’s RSI level was 40 on July 19, 2017.

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