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How Closely Are Miners Tracking Gold?

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Apr. 19 2018, Updated 11:16 a.m. ET

Miners’ performance

Usually, precious-metal-mining companies follow precious metals. Precious metals have risen over the past few days, supporting mining companies.

In this article, we’ll look at the primary technical readings—moving averages and RSI (relative strength index) scores—of a select group of miners. The miners we’ve selected for analysis are First Majestic Silver (AG), Goldcorp (GG), Gold Fields (GFI), and Barrick Gold (ABX). This year, GG has risen 12.6%, while AG, GFI, and ABX have fallen 1.9%, 9.1%, and 9.1%, respectively. The mining-based fund we’ve added to this discussion, the VanEck Vectors Junior Gold Miners ETF (GDXJ), has fallen 1.9%. All four miner stocks—AG, GG, GFI, and ABX—rose on April 13, 2018, by 2.1%, 0.91%, 3.7%, and 2.1%, respectively.

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Moving averages

AG and GG are trading above their 20-day and 100-day moving averages, while GFI is trading below its 20-day and 100-day moving averages. ABX is trading above its 20-day moving average, but below its 100-day moving average.

A stock trading at a massive discount to its moving average suggests a potential rise in its price, while a significant premium indicates a fall. All four miners’ target prices are considerably higher than their current trading prices, indicating a potential rise.

Relative strength index scores

On April 13, 2018, AG, GG, and GFI, ABX had RSI (relative strength index) scores of 60.1, 61.1, 42.3, and 65.9, respectively, while the VanEck Vectors Junior Gold Miners ETF had an RSI score of 56.4. An RSI score above 70 suggests an impending downward price correction, while a score below 30 indicates an upward price correction.

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