Analyzing the Volatility in Precious Metals Mining Companies


Mar. 16 2018, Published 8:52 a.m. ET

Mining stock performances

Precious metals mining companies have been seeing mixed performances over the past few days. Precious metals witnessed a down day on March 15, 2018, which was also mostly elaborated in the performances of mining companies.

With more interest rate hikes likely to come in 2018, analysts expect precious metals and miners to underperform. In this part of the series, we’ll analyze miners AngloGold Ashanti (AU), Kinross Gold (KGC), Alacer Gold (ASR), and IAMGOLD (IAG). We’ll also look at their technical indicators.

All four miners under discussion have seen falls in their prices on a trailing-30-day basis. The VanEck Vectors Junior Gold Miners ETF (GDX) and the Global X Silver Miners ETF (SIL) fell 1.7% and 1.3%, respectively, on March 15.

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Volatility analysis

The implied volatility reading of a stock measures the change in the price of the asset with respect to the fluctuations in the price of its call option. AU, KGC, ASR, and IAG have implied volatilities of 38.5%, 38.7%, 80.2%, and 46.8%, respectively.

RSI readings

A stock’s RSI (relative strength index) level provides insight into whether it’s overbought or underbought. When a stock’s RSI is above 70, it shows that the asset could be in overbought territory and that its price could correct downward. When a stock’s RSI is below 30, it suggests that the stock may be oversold and that its price could rise. AU, KGC, ASR, and IAG have RSIs of 30, 55.8, 43.5, and 16.5, respectively.


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