Most precious metals and their related mining companies have witnessed a choppy market in most of 2018, thanks to slumping precious metal prices. Precious metals are more closely associated with the downturn in these precious metals rather than the overall sentiment of the equity markets.
The VanEck Vectors Junior Gold Miners ETF (GDXJ) is a reliable sentiment indicator of the broader precious metal mining sector. This ETF has declined about 5.0% on a YTD (year-to-date) basis and is trading below its 20-day and 100-day moving averages.
In this article, we’ll look at the performance of a few selected miners and their technical indicators. We’ve chosen to look at Goldcorp (GG), Agnico-Eagle Mines (AEM), Yamana Gold (AUY), and Barrick Gold (ABX). Among these miners, only Goldcorp has a YTD gain of 5.3%. AEM, AUY, and ABX have lost 3.5%, 5.1%, and 11.2%, respectively, YTD.
Moving average indicators
GG, AEM, and ABX are trading at considerable discounts to their 20-day and 100-day moving averages. AUY is trading above its 20-day moving average but at its 100-day moving average. When a stock trades at a significant discount to its moving average, this trend usually suggests a potential price increase, while a considerable premium indicates a fall in its price. All four miners’ target prices are considerably higher than their current trading prices, suggesting a potential uptrend.
On June 26, GG, AEM, AUY, and ABX had RSI scores of 30.5, 50.5, 52.9, and 43.6, respectively. GDXJ had an RSI score of 39.7. An RSI score above 70 suggests an impending downward price correction, while a score below 30 indicates an upward price correction.