Mining stocks analysis
Last month, the market’s unrest had a significant effect on precious metals and miners, leading to increases in prices. However, the US dollar has strengthened recently, which had a negative impact on precious metals and mining stocks. 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 volatilities. The miners we’ve selected for our analysis are Wheaton Precious Metals (SLW), Cia De Minas Buenaventura (BVN), and Iamgold (IAG). In the last 30 days, these four miners have risen, except for BVN, which had a marginal fall of 0.38%. SLW, KGC, and IAG have risen 3%, 1.3%, and 9.6%, respectively.
Implied volatility measures price fluctuations in an asset based on variations in the price of its call option. SLW, BVN, KGC, and IAG have implied volatilities of 30.8%, 28.5%, 34.8%, and 41.3%, 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. SLW, BVN, KGC, and IAG have RSI scores of 50, 29.4, 71.1, and 52.6, respectively.
Among the precious metal mining funds, the iShares MSCI Global Gold Miners (RING) and the Sprott Gold Miners ETF (SGDM) rose 0.94% and 0.51%, respectively, on May 3. These two funds have year-to-date losses of 3.2% and 4.4%, respectively.