Mining funds and shares
The gloom in the mining sector is mainly due to the fall in precious metals. Gold, silver, platinum, and palladium have fallen 1.9%, 2.9%, 5.6%, and 0.53%, respectively, on a five-day trailing basis.
Among the gold-based funds that have also significantly declined in the past week are the ETFS Gold Trust (SGOL) and the PowerShares DB Gold ETF (DGL). They have a five-day loss of 2% each and YTD (year-to-date) losses of 5% and 5.4%, respectively.
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 Newmont Mining (NEM), Barrick Gold (ABX), Eldorado Gold (EGO), and Harmony Gold (HMY).
Among these four miners, NEM, EGO, and HMY have fallen 2.8%, 11.7%, and 5.3%, respectively. ABX is almost flat, up only a marginal 0.31%.
The optimism among analysts for Newmont seems good. It has two “sell” recommendations and ten “buy” recommendations. Barrick Gold has 15 “hold” recommendations, three “sell” recommendations, and four “buy” recommendations. Harmony Gold has an equal number of “buy,” ”hold,” and ”sell” recommendations, and Eldorado has more “hold” recommendations.
An RSI score higher than 70 suggests that a stock could be overbought and that its price could fall. An RSI score below 30 indicates that a stock could be oversold and that its price could rise. NEM, ABX, EGO, and HMY have RSI scores of 37.4, 48.8, 22.1, and 54.4, respectively.