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The Performance of Mining Stocks in January 2018

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Mining stock analysis

The miners had a good start to 2018 as they saw an upswing in price due to the revival of precious metals. All four precious metals have seen positive price returns since the beginning of 2018. 

This article will focus on the miners and their technical indicators. The miners that we have selected for this analysis are New Gold (NGD), Sibanye Gold (SBGL), Pan American Silver (PAAS), and AngloGold Ashanti (AU).

The rise in precious metals gave positive returns to most miners. SBGL, PAAS, and AU have increased 0.80%, 7.0%, and 16.7%, respectively, on a 30-day trailing basis. NGD has seen a marginal drop in its price of 4.8% during the same timeframe.

The VanEck Vectors Gold Miners ETF (GDX) and the Global X Silver Miners ETF (SIL) also saw their prices rise 4.8% and 1.5%, respectively, during the past one-month period.

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Volatility analysis

Implied volatility is a measurement of the price changes in precious metals given the fluctuation in the price of its call option. NGD, SBGL, PAAS, and AU have implied volatility figures of 49.8%, 50.8%, 35.1%, and 35.8%, respectively.

RSI readings

The RSI (relative strength index) provides direction on whether a stock is comparatively overbought or underbought. When a stock’s RSI level is above 70, it shows that the asset could be in overbought territory, so its price corrects downward. 

When a stock’s RSI indicator is below 30, it indicates that the stock could be oversold and its price could increase. NGD, SBGL, PAAS, and AU have RSI levels of 41.1, 39.6, 65.1, and 73.5, respectively.

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