Mining stock analysis
Precious metals have seen their prices fall over the last few months. Among the four miners in this discussion, Goldcorp (GG) and Newmont Mining (NEM) have dropped 4.2% and 6.2%, respectively, over the last month. Royal Gold (RGLD) and Sibanye Gold (SBGL) have risen 3.6% and 14.6%, respectively, during the same timeframe.
Most precious metals mining stocks have fallen in the last few months due to diminishing gold prices. The US dollar’s revival has also affected precious metals and mining stocks recently.
In this final part of the series, we’ll look at miners’ RSI (relative strength index) scores, 100-day moving averages, and target ranges. GG, NEM, and SBGL are trading lower than their 100-day moving averages, which could indicate that they may find a rebound in their longer-term averages.
UGLD and USLV
The gold- and silver-based funds that are heavily traded in the market include the VelocityShares 3x Long Gold ETN (UGLD) and the VelocityShares 3x Long Silver ETN (USLV). These funds have fallen 13.3% and 17.9%, respectively, on a year-to-date basis.
Implied volatility measures the price fluctuations in an asset’s price based on variations in the price of its call option. GOLD, KGC, IAG, and HMY have implied volatilities of 21.6%, 31.8%, 36.9%, and 53.8%, respectively.
An RSI score above 70 suggests that a stock could be overbought and that its price could fall. A score below 30 indicates that a stock could be oversold and that its price could rise. RGLD, GG, NEM, and SBGL have RSI scores of 54.3, 35.7, 32.5, and 56.7, respectively.