Oversold, Overbought Gold Miners Based on Technical Indicators



Moving averages

In this part of the series, we’ll take a look at senior gold miners’ technical indicators. Moving averages help traders and investors make market entry or exit decisions. Usually, if a stock is trading below its moving averages, it indicates that the stock is oversold, and vice versa.

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Gold miners’ moving averages

As you can see in the above table, almost all the gold miners we’re reviewing in this series are trading at slight premiums to their 50-day and 20-day moving averages. Barrick Gold (ABX) is trading at the highest premium of 3.7% to its 50-day moving average and 0.9% to its 20-day moving average.

Goldcorp (GG) and Newmont Mining (NEM) are trading 3.1% and 0.9%, respectively, above their 50-day moving averages. Kinross Gold (KGC), on the other hand, is trading 4.4% and 3.7% below its 50-day moving average and 20-day moving average, respectively.

Relative strength index

Usually, an RSI (relative strength index) of 70 or higher is associated with an overbought level. An RSI of 30 or lower indicates that an asset may be oversold and could become undervalued.

Goldcorp is nearing the overbought level with its 14-day RSI at 69.5. In contrast, Kinross Gold is trading near the oversold level with a 14-day RSI of 29. Barrick Gold and Newmont Mining are trading at 50.4 and 53.6, respectively.

The SPDR Gold Shares ETF (GLD) and the VanEck Vectors Gold Miners ETF (GDX) are trading at 14-day RSI levels of 41.3 and 50, respectively.

Having looked at the technical parameters for gold miners, let’s conclude this series by looking at gold’s fundamental valuation and determine its potential upside or downside.


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