Usually, precious metal mining companies follow precious metals for price direction. Precious metals increased on Monday, April 16, 2018, which was followed by most mining shares.
In this part of the series, we’ll look at the primary technical readings, including moving averages and RSI (relative strength index) scores, for a select group of miners. The miners we’ve selected for analysis are B2Gold (BTG), Royal Gold (RGLD), Kinross Gold (KGC), and Eldorado Gold (EGO). Among these four miners, only RGLD has a YTD (year-to-date) gain of 8.9%, while BTG, KGC, and EGO have fallen 7.7%, 11.1%, and 31.2%, respectively, YTD. The mining-based fund that we’ve added to this discussion is the VanEck Vectors Gold Miners ETF (GDX), which has fallen 1.9% YTD.
All the above four miners rose on April 16, 2018, due to the upswing in all four precious metals. Only GDX has seen a marginal fall of 1.9%.
Moving average analysis
BTG, KGC, and EGO are trading above their 20-day moving averages and below their 100-day moving averages. Only RGLD is trading above both its 20-day and 100-day moving averages. A stock trading at a massive discount to its moving average indicates a potential rise in price, while a significant premium indicates a fall. All four miners’ target prices are considerably higher than their current trading prices, which is a positive indicator.
Relative strength index
On April 16, 2018, BTG, RGLD, KGC, and EGO had RSI levels of 55.4, 61.4, 40.7, and 63.3, respectively. The VanEck Vectors Gold Miners ETF had an RSI level of 55.1. An RSI number above 70 suggests an impending downward price correction, while a score below 30 indicates an upward price correction.