What Miners’ Technical Indicators Are Saying



Technical analysis

Most mining stocks retreated on Friday, October 20, just as precious metals did. Here, we’ll look at call implied volatility and RSI (relative strength index) levels and compare Agnico Eagle (AEM), Pan American Silver (PAAS), Kinross Gold (KGC), and IAMGOLD (IAG).

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Call implied volatility

Call implied volatility is used for reading the changes in the price of a stock with respect to the fluctuations in the price of its call option. On October 20, 2017, Agnico Eagle, Pan American, Kinross Gold, and IAMGOLD had call implied volatilities of 33.6%, 34%, 41.6%, and 44.3%, respectively. Volatility in mining stocks can frequently be higher than the volatilities of precious metals.

RSI level

RSI is used to measure whether a stock has been overbought or oversold. If a stock’s RSI is higher than 70, it may be overbought, and its price may fall. If a stock’s RSI is below 30, it could be oversold and might rise. Agnico, Pan American, Kinross, and IAMGOLD now have RSI levels of 41.7, 47.2, 48.2, and 36.6, respectively. The recent decline in these stock prices has led to a considerable fall in their RSIs.

The iShares Gold Fund (IAU) and the iShares Silver Fund (SLV) have fallen 1.9% and 2%, respectively, over the past week due to the slump in precious metal prices. The technicals of these funds are also crucial when we analyze the mining industry.


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