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Reading Mining Stock Movements in Relation to Moving Averages

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Mining stocks tumbled

On Monday, October 23, precious metal mining stocks saw a down day, despite the flat day for gold and silver. In this part of our series, we’ll assess the moving averages and the returns of key mining stocks, using the performances of Kinross Gold (KGC), Randgold Resources (GOLD), Coeur Mining (CDE), and Iamgold (IAG).

Among these four miners, KGC, GOLD, and IAG have risen 32.5%, 28.7%, and 48.8%, respectively, on a YTD (year-to-date) basis, while the Sprott Gold Miners (SGDM) has risen 10% YTD.

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Moving averages

All four of these miners are trading below their 20-day moving averages, and Randgold and Iamgold are trading above their 100-day moving averages.

Remember, a big discount below the 20-day and 100-day moving averages can suggest a possible revival in price, while a reasonable premium suggests a possible fall. The target prices of these four miners are significantly above their current trading prices, and such a trend could indicate an upcoming rise in price.

RSI levels

Due to the subsiding prices of precious metals over the past week, mining stocks and their RSI (relative strength index) levels have also fallen. KGC, GOLD, CDE, and IAG now have RSI levels of 39.7, 52.7, 23.6, and 34.4, respectively. Remember, an RSI level lower than 30 forecasts a possible upward movement in price, while an RSI below 70 forecasts the possibility of a downturn in price.

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