Besides reading the directional move in precious metals prices, it’s also important that we analyze a few crucial technical indicators for these stocks. In this part, we’ll discuss the call implied volatilities and RSI (relative strength index) levels. The miners we selected for analysis include New Gold (NGD), Gold Fields (GFI), Kinross Gold (KGC), and AngloGold Ashanti (AU).
Call implied volatility
The call implied volatility is an indicator that measures the changes in the price of an asset given the changes in the price of the call option. As of November 28, New Gold, Gold Fields, Kinross Gold, and AngloGold Ashanti have a call implied volatility of 51.3%, 40.4%, 41.6%, and 40.9%, respectively. The volatility in miners is much higher than the volatility in precious metals.
The RSI level is used to access whether a stock is overvalued or undervalued. If a stock’s RSI score is above 70, it might be overbought and its price might fall. If a stock’s RSI score is lower than 30, it could be oversold and its price might rise. New Gold, Gold Fields, Kinross Gold, and AngloGold Ashanti have an RSI level of 28.6, 60.5, 60.2, and 76.1, respectively.
The four miners display a 30-day trailing gain, except New Gold, which has a 30-day trailing loss of 10.7%.