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A Look at Gold Funds’ and Miners’ Technicals

Meera Shawn - Author
By

May 22 2018, Updated 12:17 p.m. ET

Mining stock analysis

Most precious metal mining stocks have fallen over the last few months due to falling gold prices. The US dollar’s revival has also impacted precious metals and mining stocks recently.

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—Alamos Gold (AGI), Royal Gold (RGLD), Goldcorp (GG), and Newmont Mining (NEM)—have fallen 5.4%, 1%, 4.3%, and 4.8%, respectively, over the last month.

The VanEck Merk Gold Trust ETF (OUNZ) and PowerShares DB Gold ETF (DGL), among the top ten gold-based ETFs in terms of assets under management, have fallen 1.1% and 1.5%, respectively, year-to-date.

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Volatility analysis

Implied volatility measures price fluctuations in an asset price based on variations in the price of its call option. AGI, RGLD, GG, and NEM have implied volatility of 36.8%, 18.8%, 24.2%, and 21.7%, respectively.

RSI readings

An RSI score greater than 70 suggests that a stock could be overbought and that its price could fall, whereas a score below 30 indicates that a stock could be oversold and that its price could rise. AGI, RGLD, GG, and NEM have RSI scores of 47.2, 47.9, 64.8, and 52.7, respectively.

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