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How the Trump Trade Fear Is Moving Precious Metals PART 7 OF 8
Mining stocks react
Precious metal prices saw a sudden fall in price in mid-April 2017, along with precious metal mining stocks and funds. However, the revival of precious metals over the past week has been beneficial for mining companies. Precious metal investors remain concerned about the potential impact of any further interest rate hikes by the Fed.
Recent unrest in the markets due to Trump’s commitment to trade and other policies have once again lifted the haven bids for gold and other mining stocks.
YTD (year-to-date), Newmont Mining (NEM), Silver Wheaton (SLW), Randgold Resources (GOLD), and Pan American Silver (PAAS) have risen 0.56%, 10.7%, 26.7%, and 21.4%, respectively. The VanEck Vectors Gold Miners ETF (GDX) has risen 11.7%.
The four miners mentioned above are trading above their short-term 20-day moving averages. Randgold Resources and Pan American Silver are also trading at a premium to their 100-day moving averages. A substantial premium on a stock suggests a potential fall in price, while a discount suggests a rise. The target prices of all four of these mining stocks are significantly higher than their current prices, indicating a positive outlook.
When a stock’s RSI (relative strength index) score is above 70, it indicates that it has been overbought and could fall. However, an RSI score below 30 indicates that a stock has been oversold and could rise. Mining companies’ RSI scores have risen considerably over the past week. GDX’s RSI level is at 69.6.