9 Apr

How Mining Stocks Are Moving versus Precious Metals

WRITTEN BY Meera Shawn

Miners’ performance

Usually, precious metal mining companies are closely related to movements in precious metals. Gold, platinum, and palladium had a down-day on Thursday, April 5, whereas silver had an up-day. Most mining companies followed the trend in silver, while a few turned downward.

In this part of our series, we’ll look at the primary technical readings—moving averages and relative strength index (or RSI) scores—for select miners. The miners we’ve selected for analysis are Newmont Mining (NEM), Wheaton Precious Metals (SLW), Barrick Gold (ABX), and Harmony Gold (HMY). All these stocks fell on Wednesday alongside gold and silver. All these miners were up on Thursday—by 0.72%, 0.25%, 0.40%, and 1.7%, respectively.

How Mining Stocks Are Moving versus Precious Metals

SLW and ABX have seen YTD or year-to-date losses of 7.7% and 13.1%, respectively, while NEM and HMY were up 4.7% and 25.7%. The VanEck Vectors Gold Miners Fund (GDX) has seen a downfall of 5.5%.

Moving averages

NEM and HMY are trading above their 20-day moving averages while SLW and ABX are above their 20-day moving averages. SLW and ABX are below their longer-term 100-day moving averages, while NEM and HMY are above their longer-term 100-day moving averages.

A stock trading at a huge discount to a moving average suggests a potential increase in the stock price, while a significant premium suggests a drop. All four miners’ target prices are higher than their current trading prices, which is a positive sign.

Relative strength index

On April 5, 2018, NEM, SLW, ABX, and HMY saw RSI readings of 63.2, 64.5, 58, and 56.7, respectively. The VanEck Vectors 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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