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How Miners’ Prices Are Trending in Relation to Moving Averages

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Jan. 24 2018, Updated 9:38 a.m. ET

Miners’ performances

In this article, we’ll focus on miners’ moving averages and relative strength index (or RSI) readings. The miners we’ve selected for analysis include Agnico Eagle Mines (AEM), Pan American Silver (PAAS), Buenaventura (BVN), and IAMGOLD (IAG).

All these miners have shown price rises on a YTD (year-to-date) basis. AEM, PAAS, BVN, and IAG have risen 0.17%, 7.2%, 6.8%, and 5.7%, respectively, YTD. The popular mining-based VanEck Vectors Junior Gold Miners ETF (GDX) has also risen 1.8% on a YTD basis.

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Moving averages

The moving average indicator can give insight into the directional movements of precious metals.

PAAS, BVN, and IAG have current trading prices that are higher than their long-term 100-day moving averages and their short-term 20-day moving averages. AEM is trading below its 20-day moving average but above its 100-day moving average. A massive discount to a moving average could indicate a potential rise in price, while a considerable premium could indicate a possible fall in price.

The target prices of all the four miners are reasonably higher than their current trading prices, suggesting a positive outlook for miners.

Relative strength index

AEM, PAAS, BVN, and IAG had RSIs of 49.4, 63.3, 66.8, and 64.3, respectively, on January 19. GDX’s RSI score is 56. An RSI score of lower than 30 indicates a potential rise in price, while an RSI score of above 70 indicates a likely price fall.

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