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How Did Mining Stocks React to the Federal Reserve’s Rate Hike?

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Mining stocks

In this article, we’ll analyze mining stocks’ price movements in relation to their moving averages. We’ll look at Agnico Eagle Mines (AEM), Barrick Gold (ABX), Eldorado Gold (EGO), and Harmony Gold (HMY).

Among these four miners, only Agnico Eagle Mines has risen, reporting a YTD (year-to-date) gain of 1.5%. Barrick Gold, Eldorado Gold, and Harmony Gold reported YTD losses of 11.7%, 60.9%, and 21.3%, respectively. The VanEck Vectors Junior Gold Miners ETF (GDXJ) reported a marginal YTD gain of 0.10%.

Most of the mining shares had a positive day on December 13, as precious metals also rebounded after the Federal Reserve raised interest rates by a quarter point.

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Moving average readings

The table above indicates that Agnico Eagle Mines and Harmony Gold are trading below their 20-day and 100-day moving averages. Barrick Gold and Eldorado Gold are trading below their 100-day moving averages but above their 20-day moving averages.

A massive discount that stands below the 20-day and 100-day moving averages could suggest a potential revival in prices, and a premium could indicate a fall. The target prices of the selected miners are higher than their current trading prices, which suggests an increase in stock prices.

RSI indicators

Agnico Eagle Mines (AEM), Barrick Gold (ABX), Eldorado Gold (EGO), and Harmony Gold (HMY) have RSI (relative strength index) levels of 35.7, 49.3, 51.2, and 43.6, respectively.

An RSI level lower than 30 indicates a potential rise in prices, and an RSI greater than 70 suggests a possible decline in prices. The VanEck Vectors Junior Gold Miners ETF’s (GDXJ) RSI level is 40.9.

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