Meera Shawn

Silver has been falling over the past few years, despite surging demand for its industrial use. Fundamentally, silver seems to be strong due to rising demand and a year-over-year shortfall in its supply.

When the Federal Reserve chair, Janet Yellen, testified to Congress on February 11, she affirmed the Fed’s consideration of negative interest rates. Under a negative interest rate scenario, investors would pay interest to the bank for holding their money.

Fears in the overall financial market about a Brexit, the possible exit of Britain from the European Union, have abated. This helped gold fall.

Gold and silver have seen trailing-five-day losses of 0.9% and 2.7%, respectively. The reason behind the fall in the precious metals is the buoyancy of the equity markets and the gains in the US dollar.

Economic data from the United States on Tuesday, July 21, 2016, on home starts and building permits affected gold and other precious metals to a certain extent.

For the first time in history, the price of ripple has surpassed $1.

First Majestic, New Gold, Agnico, and Silver Wheaton now have RSI scores of 60.5, 56.2, 57.6, 59.6, respectively.

Bitcoin prices touched a three-week high of $17,712.40 on January 6, 2018, and then fell. As of Monday, January 8, 2018, at 5:00 AM EST, it had a 24-hour fall of 5.4%.

The RSI levels of our four select mining giants have all increased lately due to their higher stock prices.

Mining companies like First Majestic Silver (AG), Silver Wheaton (SLW), Pan American Silver (PASS), Coeur Mining (CDE), and Hecla Mining (HL) are primarily into silver exploration.

It’s expected that precious metal mining stocks will follow precious metals. So it’s crucial to know which stocks are closely associated with precious metals.

As automobile catalysts comprise ~44% of the demand for platinum, the Volkswagen scandal curbed the demand for diesel-fueled cars that use platinum as a catalyst. This pulled down the already depressed platinum and comparatively strengthened palladium.

With declining gold prices, the most famous gold ETF, the SPDR Gold Shares ETF (GLD), has also lost its allure. It’s trading at lower volume.

Indian jewelers have called off their 43-day strike, which began as a reaction to a 1% excise duty on gold jewelry.

During the past week, average hourly earnings, excluding the farming industry, were below analysts’ expectation of 0.10%.

The Direxion Daily Gold Miners (NUGT) and the ProShares Ultra Silver (AGQ), both leveraged mining funds, both have recovered and jumped 19.4% and 24.9%, respectively, on a five-day trailing basis.

Though an increase in rates may initially dim the luster of the metal, after the hike, gold may soar, uninterrupted by looming fears.

Oil is widely used in mining exploration, and a surge in oil prices may squeeze miners’ margins, leading to a fall in their share prices.

Monetary policies have been crucial in determining the movement in precious metals.

Despite the ongoing slump in the precious metals market, it seems that there could be hope going forward.

Gold’s price dipped 0.13% to $1,312.8 per ounce on May 9. The fall in gold was extended for a number of reasons.

Gold ended the day almost flat on Wednesday, May 2, and closed at $1,304.90 per ounce.

Besides ongoing geopolitical concerns, a crucial factor that gold keeps looking to for directional moves is the US dollar.

Mining stocks tend to move with gold prices. In this part, we’ll analyze the correlation between gold and four mining stocks.

Another critical factor that has been affecting the price movement of precious metals is overall market volatility.

In this part of the series, we’ll analyze the correlations of the movements of a group of mining stocks with gold.

In this article, we’ll do a technical analysis of a few select mining stocks. When investing in mining stocks, it’s crucial to read their indicators.

Investors (SPX-INDEX) around the world looked to gold (GLD) (IAU) for the rescue during the slump in bitcoin prices.

A quick look at the relationship between the two core precious metals, gold and silver, could also be helpful in the analysis of the overall precious metals market.

As we know, precious metals are closely tied to movements in US interest rates. Bonds and equities are both yield-bearing assets, so a rise in yields often causes a slump in demand for assets such as gold and silver.

Most mining stocks have risen during the past month due to the revival in precious metals prices.

Precious metals prices shot up on January 19, 2018, with concerns looming over the shutdown the of the US government.

NGD and HL are both trading below their longer-term 100-day moving averages.

Mining stocks tend to take their cues from gold.

First Majestic Silver saw correlation drop during the past three years. On a three-year basis, its correlation with gold was 0.57.

On January 12, 2018, precious metals were once again on a rising streak, which also led to increasing prices for mining shares.

The target prices of the four miners we’re covering in this part are higher than their current trading prices, which could lead to an optimistic outlook on their prices.

AngloGold Ashanti has seen the highest correlation to gold in the past year, while Eldorado Gold has seen the lowest correlation.

SLW, GOLD, ABX, and BVN have call implied volatilities of 30.8%, 23.9%, 24.5%, and 30.8%, respectively.

The US dollar rose 0.18% on Tuesday, January 9, 2018, which led to the lower price of spot gold (GLD) and silver.

Gold is a non-yield bearing asset that reacts negatively to rises in the interest rate.

Most mining stocks have risen over the past one month due to the revival in gold prices.

Most of the mining companies have risen during the past few weeks. The miners tend to move according to precious metal prices rather than the equities market in general.

Gold is the most influential precious metal, and most miners follow its price trends.

New Gold, Agnico-Eagle Mines, Franco-Nevada, and Cia de Minas Buenaventura have call-implied volatilities of 45.2%, 24.4%, 21.7%, and 31.2%, respectively.

During the past year, IamGold has seen the highest correlation to gold, while Eldorado Gold has the lowest correlation.

Although most of the upswing in precious metals has been due to the rise in geopolitical risks in 2017, the dollar has been the most crucial factor.

Most of the mining companies have increased during the past two weeks due to the rise of gold and silver.

Among these spreads, the gold-silver spread is the most talked about because it measures the number of silver ounces it takes to buy a single ounce of gold.

When analyzing platinum markets, it’s important to compare the metal’s performance with that of gold, which is the most crucial of the precious metals.