Understanding the correlations of mining stocks with gold is very important when investors are considering precious metal miners. In this article, we’ll look at First Majestic Silver (AG), B2Gold (BTG), Agnico Eagle Mines (AEM), and Primero Mining (PPP).
The mining funds are also strongly dependent on the precious metals for their directional moves. Mining stocks like the VanEck Vectors Gold Miners (GDX) and the Sprott Gold Miners (SGDM) rose 0.64% and 1.4%, respectively, on Monday.
Correlation with gold
On a YTD basis, First Majestic has the lowest correlation to gold, while Primero Mining has the highest correlation to gold.
Among the above mining stocks, only Agnico Eagle has seen a rising trend in its correlation to gold over the past three years. The other three miners have a mixed trend in correlation to gold.
Agnico Eagle has a three-year correlation of 0.68 with gold and a one-year correlation of 0.87. This correlation of 0.87 suggests that almost 87.0% of the time during the past year, Agnico has moved in the same direction as gold.
These miners’ correlations with gold during the past one year have risen.