How Recent Mining Stock Performances Relate to Metals



Mining stock rebound

Precious metal mining companies gave a mixed reaction on Thursday, October 12. Most of the time, we expect mining companies to follow the trend in metals, but that’s not always the case. Although all four precious metals rose on Thursday, many of mining stocks had a down day, and the VanEck Vectors Gold Miners (GDX) also fell.

In this final part of our series, we’ll assess the moving averages of key mining stocks over the past month, using Sibanye Gold (SBGL), Franco-Nevada (FNV), Iamgold (IAG), and Harmony Gold (HMY).

On a YTD (year-to-date) basis, Sibanye, Franco-Nevada, and Iamgold have risen of 2.3%, 34.4%, and 61%, respectively, while Harmony Gold has seen a YTD loss of 15.4%. The gold-based VanEck Vectors Gold Miners (GDX) has seen a YTD rise of 13.4%.

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Technical details

Sibanye and Franco-Nevada are trading above their 20-day moving averages, while Iamgold and Harmony are trading below their 20-day moving averages. These stocks—except Sibanye—are trading above their 100-day moving averages.

Remember, if mining stocks are trading at a reasonably higher premium to their short- and long-term moving averages, they could soon see a downward revision in price. If such stocks are trading at a good discount, prices could correct upward.

All four of these key mining stocks have seen their target prices rise above their current trading prices, which suggests a positive outlook. The RSI (relative strength index) levels for these four mining stocks have been known to follow the trend of the prices, and their RSI levels have rebounded recently. SBGL, FNV, IAG, and HMY currently have RSI levels of 55.3, 56.3, 47.5, and 51.1, respectively.


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