Mining stocks tend to move in accordance with gold prices. In this final part of the series, we’ll analyze the correlation between gold and four mining stocks: First Majestic Silver (AG), B2Gold (BTG), Gold Fields (GFI), and Agnico-Eagle Mines (AEM). Among the miners under consideration, Gold Fields has the highest correlation with gold, while B2Gold has the lowest correlation.
During the past three years, AEM’s and AG’s correlations with gold have declined, while CDE’s and BTG’s correlations have been mixed.
AEM’s three-year correlation with gold is 0.76, whereas its one-year correlation is 0.68. A correlation of 0.68 indicates that 68% of the time, AEM has moved in the same direction as gold. The rest of the time, its correlation was not coordinated with gold.
Miners’ correlation trends with gold are a vital factor for investors to consider since gold is the most crucial of the four precious metals. A change in gold impacts the other three precious metals as well as mining shares. During major economic events such as the interest rate hike by the Fed, these relationships become very prominent.