Mining stock analysis
Recent market unrest has had a significant effect on precious metals and the US dollar, which influences dollar-denominated precious metals and mining stocks. In this part of the series, we’ll look at miners’ RSI (relative strength index) scores and implied volatility. The miners we’ve selected for our analysis are Wheaton Precious Metals (SLW), Randgold Resources (GOLD), AngloGold Ashanti (AU), and IAMGOLD (IAG). In the last 30 days, miners’ performance has been mixed. GOLD and AU have fallen 2.5% and 0.11%, respectively, while SLW and IAG have risen 6.8% and 13.2%.
Implied volatility measures price fluctuations in an asset based on changes in the price of its call option. SLW, GOLD, AU, and IAG have implied volatility of 30.8%, 30.5%, 37.8%, and 42.9%, respectively.
Relative strength index scores
A stock’s RSI (relative strength index) score indicates whether it’s overbought or underbought. An RSI score over 70 suggests that a stock could be overbought and that its price could fall, and a score below 30 indicates that a stock could be oversold and that its price could rise. SLW, GOLD, AU, and IAG have RSI scores of 68, 74.8, 43.6, and 61.8, respectively.
The Sprott Gold Miners ETF (SGDM) and the iShares MSCI Global Gold Miners ETF (RING), which have also been tracking precious metals, rose 3.4% and 3.3%, respectively, last week. However, they have fallen year-to-date.