uploads/2018/01/MINER-4-1.png

What Precious Metals’ Technical Levels Indicate

By

Updated

Miner performance

Precious metal mining companies have witnessed a rebound in their prices alongside precious metals. This article will look at a detailed analysis of miners including Royal Gold (RGLD), New Gold (NGD), Agnico-Eagle Mines (AEM), and IAMGOLD (IAG). These stocks have risen 1.3%, 5.2%, 1.8%, and 2.6%, respectively, so far in 2018. The VanEck Vectors Junior Gold Miners Fund (GDXJ) has seen a marginal YTD gain of 1%.

Article continues below advertisement

Moving averages

AEM and IAG are trading considerably above their 20-day and 100-day moving averages. New Gold is above its 20-day moving average but below the longer-term 100-day moving average. Royal Gold is below both the 100-day and 20-day moving averages.

A stock that’s trading significantly below its 20-day and 100-day moving averages could mean a potential rebound in prices. On the other hand, a stock that is significantly above its 20-day and 100-day moving averages could fall.

The target prices of all the four miners are higher than their current trading price, which gives a positive outlook to miners.

Relative strength index

RGLD, NGD, AEM, and IAG had RSI (relative strength index) scores of 44.5, 85.7, 90.5, and 73.8, respectively, as of January 5. The RSI levels have increased considerably after the upswing in precious metals. 

An RSI score lower than 30 indicates a potential rise in prices, while an RSI score higher than 70 points indicates a fall in prices. GDXJ had an RSI level of 78.1 as of January 5.

Advertisement

More From Market Realist