The chances are high that fluctuations in precious metals are closely tracked by the mining shares. When investors intend to park their money in the miners, there are a few technical indicators that they need to analyze.
In this article, we’ll look at some important technical indicators including volatility figures and RSI levels for major miners such as Silver Wheaton (SLW), Coeur Mining (CDE), Barrick Gold (ABX), and IamGold (IAG).
Call-implied volatility is a measurement of the fluctuations in an asset’s price when it comes to changes in the price of its call option. On August 2, 2017, Silver Wheaton, Coeur Mining, Barrick Gold, and IamGold had volatilities of 30.8%, 45.6%, 28.1%, and 50.4%, respectively. The volatility of the mining stocks is often greater than the volatilities of precious metals.
RSI (relative strength index) measures whether a stock has been overbought or oversold. If a stock’s RSI is above 70, it may be overbought, and its price may fall. If a stock’s RSI is below 30, it could be oversold and might correct upward.
RSI levels for the miners mentioned above have recently witnessed revivals. Silver Wheaton, Coeur Mining, Barrick Gold, and IamGold have RSI levels of 64.1, 51.6, 71.0, and 68.2, respectively. There’s been a significant rebound in the prices of precious metals.
Mining-based funds like the VanEck Vectors Junior Gold Miners ETF (GDXJ) and the iShares MSCI Global Gold Min ETF (RING) is also impacted by changes in precious metal prices. These two funds have increased about 5.3% and 8.6%, respectively, on a year-to-date basis.