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Technical Indicator Roundup: Gold Miners after 3Q17

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Moving averages

In this article, we’ll look at the technical indicators for senior gold miners. Moving averages help traders and investors make market entry or exit decisions. Usually, if a stock is trading below its moving averages, it indicates that the stock is oversold, and vice versa.

Gold miners’ moving averages

As you can see in the table above, almost all the gold miners are trading at a discount to their respective 50-day moving averages. Barrick Gold (ABX) is trading at an 11% discount to its 50-day moving average and a 2.8% discount to its 20-day moving average. Newmont Mining (NEM) is also trading 2.4% below its 50-day moving average. Only Goldcorp (GG) is trading 1.0% above its 50-day moving average.

Relative strength index

Usually, an RSI (relative strength index) of 70 or higher is associated with an overbought level while an RSI of 30 or less indicates that the asset may be oversold and could become undervalued.

There’s no clear trend as far as RSI is concerned for the SPDR Gold Shares (GLD) and the VanEck Vectors Gold Miners ETF (GDX). Barrick Gold, however, is trading below the RSI level of 30, which might indicate that there’s a good chance for the stock to rise. The company’s recent mine issues led the stock to fall along with a lower RSI level. Kinross Gold (KGC), on the other hand, is quite close to reaching the overbought level of 70. There might be a pullback ahead for the stock.

Having looked at the technical parameters for gold miners, let’s conclude this series by looking at gold’s fundamental valuations and determine its potential upside or downside.

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