A Comparison of Mining Stocks’ Volatility


Mar. 26 2018, Published 3:51 p.m. ET

Mining stock analysis

It was widely expected that precious metals and miners would react negatively after the FOMC (Federal Open Market Committee) meeting. However, as the FOMC announced that there would be only two hikes this year instead of three, metals rose.

In this part of the series, we’ll look at miners’ RSI (relative strength index) scores and implied volatility. Miners we’ve selected for our analysis are Goldcorp (GG), Agnico Eagle Mines (AEM), Randgold Resources (GOLD), and Harmony Gold (HMY).

In the last 30 days, Randgold has fallen 1.3%, while GG, AEM, and HMY have risen 8.3%, 3.2%, and 10.4%, respectively. The VanEck Vectors Gold Miners ETF (GDX) and the Global X Silver Miners ETF (SIL) have also risen during the last month, by 3.6% and 3.4%, respectively.

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Volatility analysis

Implied volatility measures price fluctuations in an asset based on changes in the price of its call option. GOLD, GG, AEM, and HMY have implied volatility of 33.1%, 30.5%, 29.1%, and 58.6%, respectively.

RSI readings

A stock’s RSI score indicates whether it’s overbought or underbought. A stock’s RSI level being above 70 suggests the stock could be overbought and that its price could fall, and an RSI level below 30 suggests the stock could be oversold and that its price could rise. GOLD, GG, AEM, and HMY have RSI scores of 69.1, 72.2, 54.9, and 55.6, respectively.


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