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Analyzing Mining Stocks’ Post-Rate-Hike Movement

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Dec. 18 2017, Updated 3:46 p.m. ET

Mining stock analysis

In this part of the series, we’ll take a look at First Majestic Silver’s (AG), B2Gold’s (BTG), Goldcorp’s (GG), and New Gold’s (NGD) call-implied volatility and RSI (relative strength index) scores.

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Volatility analysis

AG, BTG, GG, and NGD have call-implied volatility of 42.9%, 54.8%, 25.7%, and 52.4%, respectively. New Gold and Goldcorp have reported trailing-30-day losses of 6.6% and 8.1%, respectively, while First Majestic and B2Gold have reported trailing-30-day gains of 10.7% and 7.2%.

Relative strength index

If a stock’s RSI (relative strength index) score is greater than 70, it could be in overbought territory, and its price could fall. If a stock’s RSI score is lower than 30, it could be oversold, and its price could rise.

AG, BTG, GG, and NGD have RSI scores of 66.3, 60.6, 32.1, and 25.5, respectively. These RSI figures have recently rebounded. 

The Physical Swiss Gold Shares ETF (SGOL) and the Physical Silver Shares ETF (SIVR) rose 0.21% and 0.9%, respectively, on December 15, 2017, as the Fed raised interest rates by a quarter point. The rebound was felt in most precious metal-based funds. 

Precious metals and miners have maintained a downward trend in the last month, as the market expected interest rates to rise. After the rate hike, most miners and precious metals rebounded. 

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