Gold price | Weak <b>gold price</b> brings carnage to mining stocks | MINING.com |
| Weak <b>gold price</b> brings carnage to mining stocks | MINING.com Posted: 27 May 2014 04:20 PM PDT The gold price slid more than $25 or over 2% an ounce on Tuesday to a day low of $1,263 an ounce, levels last seen early February. Gold's negative momentum saw gold stocks selling off heavily on the day with the Market Vectors Gold Miners ETF (NYSEARCA:GDX), holding stock in the world's top gold miners, coming close to wiping out gains for the year, while the Philadelphia Gold & Silver Index (INDEXNASDAQ:XAU) fell 3.6% to levels last in January. While the yellow metal is still up some 5% in value this year, the shares of some major gold miners are back in negative territory for 2014. By the close on Monday, Barrick Gold Corp (NYSE:ABX, TSE:ABX) had lost 4% or $500 million in market value with 2 million shares changing hands, making the world's number one producer of the metal one of the worst performers in the sector on the day. The Toronto-based miner is the subject of a number of class-action lawsuits over its costly Pascua Lama project on the border between Chile and Argentina. The class actions allege that Barrick Gold shareholders lost billions of dollars as a result of Barrick's "misrepresentations and failures" regarding the stalled project. The technically and politically challenging project high in the Andes launched in 2006 (initial capex costs were pegged at $1.5 billion but has now ballooned to $8.5 billion) suffered a number of defeats in Chilean courts about water use and the impact on glaciers in the area. Barrick which will produce roughly 7 million ounces of gold in 2014 is now worth $20.1 billion on the TSX, down 7.5% so far this year. Barrick shares struck 21-year lows In July last year after peaking at a $54 billion market value in 2011. Newmont Mining Corp (NYSE:NEM) with a market value of $11.4 billion did not escape the carnage trading down 3% in regular hours. Talks in April between Newmont and Barrick about a possible merger ended acrimoniously with both sides going public with unflattering comments about incompatible corporate cultures. The world's third largest gold producer behind Newmont, AngloGold Ashanti (NYSE:AU) dropped 6% in Tuesday trade, but the company's ADRs listed in New York is indicative of a turnaround story. First-quarter production for Johannesburg-based Anglogold of 1 million oz at a total cash cost of $770/oz, was the strongest first quarter performance in four years and has helped the counter gain 34.7% this year. Goldcorp (TSE:G) declined a shade under 4% on Tuesday. The Vancouver-based company has regained the title as the world's most valuable gold stock with an 11% gain in market capitalization to $20.8 billion this year. Goldcorp is expected to produce around 3 million ounces of gold this year and was praised by investors for walking away from a hostile takeover of fellow Canadian gold miner Osisko (TSE:OSK). Osisko found white knights in the form of Yamana Gold (TSE:YRI) and Agnico Eagle Mines (TSE:AEM) which will now jointly own 100% of the Montreal firm and take over operation of the company's only operating mine, the Canadian Malartic in Quebec. Yamana which is forecast to produce 1.4 million ounces this year, slid 3.2% on Tuesday, while Agnico Eagle Mines (TSX:AEM) losses were steep at 5.8%. The bidding for Osisko boosted the stock 66% this year for a market value of $3.5 billion while Toronto-based Yamana is worth $5.9 billion and Agnico $5.3 billion making the acquirers the globe's seventh and eighth most valuable listed gold miners. Yamana shares are down 14% year to date, while Agnico has stayed on the positive side. Toronto's Kinross Gold (TSX:K) lost 3.5% on the day and is back in the red for 2014 over worries about the impact on the company's operating mines in Russia amid the tensions over Ukraine. Kinross is worth a good $1.2 billion less than Yamana, despite being forecast to produce some 1.3 million ounces more than Yamana this year. Canada's Eldorado Gold Corp (TSX:ELD) declined 3.6% and Iamgold (TSE:IMG) dropped 3.7%. South African miner Gold Fields (NYSE:GFI) was worse hit ending down 6.9% in New York, but the Johannesburg-based firm which is expected to mine 2 million ounces this year is still showing gains of 13.7% in 2014. Randgold Resources ADR's trading on the Nasdaq (LON:RSS,NASDAQ:GOLD) contained losses at 1.6% and is up strongly this year as its massive new Kibali mine in the Democratic Republic of Congo (DRC) exceeds expectations. Africa-focused Randgold has become something of an investors' favourite with the company valued at some $7 billion in London, as it rapidly ramps up production in 2014 to around 1.2 million ounces.  |
| <b>Gold price</b> plunges to February lows | MINING.com Posted: 27 May 2014 10:20 AM PDT The gold price fell more than $25 on Tuesday, hurt by a combination of a showing of strength for the US economy, hopes of an easing of the conflict in Ukraine and technical factors. On the Comex division of the New York Mercantile Exchange, gold futures for August delivery – the most actively traded contract following the expire of June options – traded at $1,265.90 an ounce in midday dealings, near the lows of the day and down over 2% from yesterday's close. Gold has wiped out a chunk of its gains for the year trading a levels last seen February 7 and down $115 an ounce from 2014 highs reached mid-March. Data out on Tuesday showed US consumer confidence rose, durable goods orders increased and one housing measure in the world's largest economy showed double digit gains. The economic news which was broadly in line with expectations boosted the dollar and pushed the gold price in the opposite direction. Investors also took the opportunity to rotate out of gold and into stock markets, sending New York indices into fresh record territory. Gold status as a hard asset and safe-haven during times of turmoil was tarnished by a cooling of tensions in the Ukraine after mostly peaceful elections and the ousting of separatists in the east of the country. After trading in a tight range for more than two months on either side of $1,300 an ounce, gold broke through key technical levels on Tuesday. According to some technical analysts gold was primed for a break-out price move and the drop to below $1,280 could signal further selling: "The path of least resistance was lower, as gold broke through its recent range. The wedge of $1,287 -$1,305 gave way overnight as sellers reemerged after the election in the Ukraine. Although, tensions remain high in that country, the risk premium has eased and traders pushed through recent support, as we find ourselves at a pivotal level of $1,277. A stronger U.S. dollar tone, aided by better than expected April durable goods, up 0.8%, continue to drive capital into to the equity markets. The $1,277 level must hold to prevent a test of significant support at $1,262. said Peter Hug, global trading director at Kitco Metals, in his note. Sentiment on the gold market was also hurt by the latest data from the World Gold Council released last week that showed demand from top gold consumers China and India slowed dramatically in the first quarter of this year. At the same time investors also continued to pull money out of the SPDR Gold Trust (NYSEARCA:GLD), the world's largest physically-backed gold ETF accounting for over 40% of total holdings in the industry. Holdings in GLD continued to slide in May after 24 tonnes worth of net redemptions in April. Holdings now stand at 776.9 tonnes or less than 25 million ounces, the lowest level since December 2008.
 |
| You are subscribed to email updates from Gold price - Google Blog Search To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 Comment for "Gold price | Weak gold price brings carnage to mining stocks | MINING.com"