Mining stock analysis
During the last month, the market’s unrest had a significant effect on precious metals and miners, leading to increases in their prices. However, the US dollar has strengthened recently, which had a negative impact on precious metals and mining shares. The settling of the market unrest could have also caused a withdrawal of haven bids.
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 are Barrick Gold (ABX), Hecla Mining (HL), Eldorado Gold (EGO), and IamGold (IAG). In the last 30 days, these four miners have increased 5.9%, 6.6%, 23.3%, and 6.7%, respectively.
Implied volatility measures price fluctuations in an asset based on variations in the price of its call option. ABX, HL, EGO, and IAG have implied volatilities of 26.3%, 43.5%, 60.4%, and 40.1%, respectively.
Relative strength index scores
A stock’s RSI score indicates whether it’s overbought or underbought. An RSI over 70 suggests that a stock could be overbought and that its price could fall. A score below 30 indicates that a stock could be oversold and that its price could rise. ABX, HL, EGO, and IAG have RSI scores of 60.5, 60.0, 56.1, and 64.1, respectively.
Among the precious metal mining funds, the VanEck Vectors Junior Gold Miners ETF (GDXJ) and the Sprott Gold Miners ETF (SGDM) increased on May 2 by 1.1% and 0.46%, respectively. These two funds have year-to-date losses of 3.1% and 4.8%, respectively.