Shares of Yamana Gold Inc. were notable movers during the trading session. The stock surged by close to 6 percent on the back of relatively heavy volumes. It is important to state that a surge in the stock price on the back of above average volumes is a clear indication of the shift of momentum towards the buy side. Many analysts believe the rally in the stock was on the back of the strong rally seen in gold prices which were higher by close to 2 percent on the back of heavy volumes. It is imperative to state that the price action in Yamana Gold is directly proportional to the changes in gold prices.
Gold prices surged during the trading session on the back of short covering and bargain hunting at lower levels which is being seen as a huge positive. It is important to state that gold prices had hit a 5.5 year low during Thursday’s trading session but the announcement of further easing measures from the European Central Bank were seen as a huge positive for gold prices. It was also reported today that the US economy added 211,000 jobs during the month of November beating most expectations. Many analysts on the street believe that the jobs report gives the Federal Reserve enough head room to hike interest rates in the near term. Traders believe the emergence of buying interest at lower levels is a huge positive.
When looking at the charts for Yamana Gold Inc., the stock has been witnessing buying interest at lower levels which has seen the stock break above the resistance zone at $2.10. The relative strength index has given a fresh buy signal indicative of the strong buying interest. Traders believe the stock could head to levels of $2.704 in the near term.