10 May

How Are Miners Performing Relative to Precious Metals?

WRITTEN BY Meera Shawn

Miners’ performances

Usually, precious metals mining companies follow precious metals. Precious metals seem to be in doldrums lately over the strength in the US dollar and the Federal Reserve’s decision to raise interest rates. The recent slump in demand for haven assets has also affected mining stocks.

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 First Majestic Silver (AG), Goldcorp (GG), Wheaton Precious Metals (SLW), and Kinross Gold (KGC). SLW and KGC have fallen 2.8% and 15%, respectively, on a YTD (year-to-date) basis. AG and GG have risen 1.5% and 5.5%, respectively, YTD. The VanEck Vectors Junior Gold Miners ETF (GDXJ) has seen a YTD fall of 2.1%.

How Are Miners Performing Relative to Precious Metals?

All four miners except SLW fell on May 9. SLW rose 0.37%, while AG, GG, and KGC fell 0.15%, 0.15%, and 10.9%, respectively. GDXJ rose a marginal 0.03%.

Moving averages

AG and SLW are trading above their 20-day and 100-day moving averages, while GG and KGC are trading below their 20-day and 100-day moving averages.

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

RSI scores

On May 9, AG, GG, SLW, and KGC had RSI scores of 49.3, 28.4, 46.3, and 39.3, respectively. GDXJ had an RSI score of 42.3. An RSI score of above 70 suggests an impending downward price correction, while a score of below 30 suggests an upward price correction.

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