By analyst
By Frik Els
In heavy volumes gold suffered its worst trading day of 2017 on Thursday with the metal coming under pressure from a rise in the US dollar to 2-month highs and a looming interest rate hike in the US.
Gold for delivery in April, the most active contract on the Comex market in New York with over 24m ounces traded by early afternoon, slumped to a low of $1,231.90, down 1.5% from yesterday’s close.
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, dipping 4%, while the Philadelphia Gold & Silver Index (INDEXNASDAQ:XAU) fell at a similar pace, nearly wiping out is year-to-date gains.
While the yellow metal is still up some 7% in value this year, the shares of some major gold miners are back in negative territory for 2014.
By the close on Thursday, Barrick Gold Corp (NYSE:ABX, TSE:ABX) had lost 4.6% with a whopping 32 million shares changing hands, making the world’s number one producer of the metal the sixth most active stock on the NYSE.
By the close Barrick had lost 4.6% with a whopping 32 million shares changing hands, making the world’s number one producer the sixth most active stock on the NYSE
Barrick is now worth $21.5 billion in New York, still up a healthy 14% so far this year. Barrick shares struck 21-year lows in July 2013 after peaking at a $54 billion market value two years before when gold was peaking above $1,900 an ounce.
The Toronto-based miner last year produced 5.5m ounces of gold, a 9% dip compared to 2015, after selling its interest in Bald Mountain and Round Mountain mines to Kinross and reducing its stake in the Porgera mine in Papua New Guinea. Aggressive cost cutting saw all-in sustaining costs for the company fall 12% to $730 in 2016.
Newmont Mining Corp (NYSE:NEM) came off fairly lightly on the day losing 2.4%, but the decline saw the company close below its opening levels for the year. Denver-based Newmont grew output 6% last year to 4.9m ounces on the back of additional production from its Merian and Long Canyon mines.
Newmont is on a growth spurt and production in 2017 could top 5m ounces for the first time and should range between 4.5 and 5.4 million ounces over the next five years according to the company. All-in costs at the company portfolio of mines are inching down more slowly and averaged more than $900 an ounce in 2016.
The world’s third largest gold producer behind Newmont, AngloGold Ashanti (NYSE:AU) dropped 4.9% in Thursday trade, and the company’s ADRs worth $4.3 billion in New York is now barely in the black so far in 2017.
Russia’s Polyus Gold, the world’s eight largest gold miner, escaped most of the carnage, trading down only slightly in Moscow where it’s worth close to RUB1 trillion
Johannesburg-based Anglogold reported an 8% decrease in annual production to 3.6m ounces in 2016. Production was impacted by safety-related stoppages at its South African mines …read more
Source:: Infomine
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