Gold Mining Stock Looks Dull for September

There’s a lot of optimism that could unwind and weigh on Newmont Mining stock

Gold was at the mercy of the greenback’s strength and Treasury yields last week, culminating in a 1.2% loss for the yellow metal. Mining stock Newmont Corporation (NYSE:NEM) has been struggling, too, down 17.5% so far in 2023. It could be a long road back for NEM, especially amid a historically bearish month.

NEM 30 Day

According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, Newmont stock is among the worst stocks on the S&P 500 Index (SPX) to own this month, looking back 10 years. Per White’s Data, NEM averages a loss of 5% in September in the last decade, and finished the month lower eight times. Keep an eye on the equity’s 30-day moving average as well, which capped off a bounce off 2023 lows in late August and could continue acting as pressure in September.

The brokerage bunch leans bullish, suggesting there is ample room for price-target cuts and/or downgrades moving forward. Of the 16 analysts in coverage, 10 sport a “buy” or better rating. Plus, the 12-month consensus price target of $54.25 is a 39.7% premium to current levels.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 50-day call/put volume ratio of 4.61, which ranks higher than all but 4% of readings from the past 12 months. Should this optimism begin to unwind, NEM could sink even lower.

Now looks like the ideal time to speculate on NEM’s next moves with premiums, which are affordably priced. This is per the equity’s Schaeffer’s Volatility Index (SVI) of 27% that ranks higher than just 15% of readings from the last 12 months, implying low volatility expectations. 

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