Usually, precious metal mining companies follow precious metals. Precious metals seem to be in the doldrums over the Fed’s decision about moving interest rates and the strength of the US dollar. The recent slump in demand for haven assets also affected the miners.
In this part of the series, 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 Sibanye Gold (SBGL), Wheaton Precious Metals (SLW), Cia De Minas Buenaventura (BVN), and Harmony Gold (HMY).
Among these miners, SBGL and SLW have fallen 24.8% and 5.3%, respectively, while BVN and HMY have increased 9.5% and 9.6%, respectively. The VanEck Vectors Gold Miners Fund (GDX) has fallen 3.7%.
These stocks under discussion, except BVN, rose on Wednesday, May 2. BVN declined 4.1%, while SBGL, SLW, and HMY rose 3.3%, 0.29%, and 1.5%, respectively.
SLW, BVN, and HMY are trading above their 20-day moving averages but below their 100-day moving averages. SBGL is above its 20-day moving average and its 100-day moving average.
A stock trading at a huge discount to its moving average suggests a potential rise in price, while a significant premium indicates a decline. All four miners’ target prices are considerably higher than their current trading prices, suggesting a potential rise.
Relative strength index scores
On May 2, SBGL, SLW, BVN, and HMY had RSI scores of 50.0, 47.9, 23.0, and 41.3, respectively. The VanEck Vectors Gold Miners ETF (GDX) had an RSI score of 48.3. An RSI score above 70 suggests an impending downward price correction, while a score below 30 indicates an upward price correction.