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Newmont Mining (NEM) is one of the very few gold mining stocks to have given a positive return year-to-date. As of April 17, it has returned 10.9%, compared to a loss of 1.5% for the VanEck Vectors Gold Miners ETF (GDX). Its strong project pipeline is the major driver behind its consistent-to-increasing production profile.
Investors are typically interested in gold mining companies’ (GDX)(GDXJ) ability to generate FCF (free cash flow) because FCF helps them invest in future growth—apart from the aim of returning cash to shareholders.
Gold markets initially tried to break above the $1350 level during the week but rolled over to form a bit of a shooting star. However, I see there is more than enough support underneath that could continue to come into the market and singled higher.
Usually, precious metal mining companies follow precious metals for price direction. Precious metals increased on Monday, April 16, 2018, as did most mining stocks.
In this part of our series, we’ll be looking at the correlation between gold and four mining stocks: New Gold (NGD), Newmont Mining (NEM), Franco-Nevada (FNV), and Randgold Resources (GOLD). Mining stocks mostly move with gold prices but not always. Mining stocks have high correlations with gold. The Global X Silver Miners ETF (SIL) and the Sprott Gold Miners (SGDM) also tend to have strong correlations with gold.
Gold prices moved lower sliding through support near the 10-day moving average which is now seen as resistance near 1,343. Support is seen near an upward sloping trend line near 1,331. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).
Crude fell nearly $1 following Trump tweet saying “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” The tweet comes as Saudi has recently said it would be happy with $80-$100 crude prices, and as OPEC/NOPEC keeps their production capped. Crude oil prices rebounded late in the trading session to close nearly unchanged and recapturing the 68-handle after initially testing lower levels.
IAMGOLD (IAG) was the best-performing gold stock of 2017, returning 51.4% for the year. It significantly outperformed the VanEck Vectors Gold Miners ETF (GDX) as well as the SPDR Gold Shares (GLD). In 2018, however, the equation has somewhat reversed. Its stock has returned -4.5% year-to-date as of April 17.
The International Monetary Fund (or IMF) also warned on April 18, 2018, that the unexpected rise in US inflation could cause significant global tensions, which could force central banks to respond firmly. It added that a hike in inflation in the US could lead the Federal Reserve to raise interest rates faster than expected. The director of the IMF’s monetary and capital markets department, Tobias Adrian, said, “What we are flagging is that at some point markets see shocks in inflation that raise inflation uncertainty and when that happens, that is associated with a rise in long-term interest rates and that might lead to a tightening in financial conditions.” While he said that the uncertainty regarding US inflation is very low, markets could have an outsized reaction to any spike.
The International Monetary Fund (or IMF) also warned that the downside risks to world financial stability have increased over the past six months. In this context, it added, “Valuations of risky assets are still stretched, with some late-stage credit cycle dynamics emerging, reminiscent of the pre-crisis period.” This it believes could lead to the unwinding of risks, leading to higher risk premiums and repricing of risky assets. The IMF’s view of US equity markets is similar to that of Morgan Stanley’s (MS).
At extreme levels, these ratings could even signal a change in direction, so it’s important for investors to track this data. In the senior and intermediate gold miner space (GDX)(GDXJ), analysts are the most bullish on Goldcorp (GG), assigning it 65% “buy” and 5% “sell” ratings.
Gold By Gold SA’s (ENXTPA:ALGLD) most recent return on equity was a substandard 1.40% relative to its industry performance of 7.64% over the past year. ALGLD’s results could indicate aRead More...
Data protection, a once-obscure field of compliance, is having a moment. Next month, a sweeping set of rules called the General Data Protection Regulation (GDPR) go into effect in the European Union. They’re being called the “gold standard” for laws of their kind in the internet age. With the GDPR, European regulators gain a potent…
Silver markets rallied a bit during the trading session on Thursday, as we have broken above the $17.30 level. This market continues to look for bullish overall, but it is very choppy in general, as it is per usual.
Crude oil markets went back and forth during the day on Thursday, gaining slightly, but showing that there is a lot of indecision. We have recently rallied significantly though, so we might be simply catching our collective breath before making the next move.
Examining Crater Gold Mining Limited’s (ASX:CGN) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceedRead More...
Gold prices rose ~3% year-to-date (or YTD) after rising ~13% in 2017. Gold prices are affected by a number of factors, including rate hike expectations, trade war fears, the US dollar, and increasing volatility.
Gold prices continued to trade sideways, as U.S. yields gained traction on Thursday buoyed the greenback and paving the way for lower gold prices. Strong jobless claims and a solid Philly fed survey buoyed the dollar. U.S. initial jobless claims dipped 1k to 232k in the week ended April 14 after falling 9k to 233k in the prior week.
Recent market unrest has had a significant effect on precious metals and the US dollar, which influences dollar-denominated precious metals and mining stocks. In this part of the series, we’ll look at miners’ RSI (relative strength index) scores and implied volatility. The miners we’ve selected for our analysis are Wheaton Precious Metals (SLW), Randgold Resources (GOLD), AngloGold Ashanti (AU), and IAMGOLD (IAG). In the last 30 days, miners’ performance has been mixed. GOLD and AU have fallen 2.5% and 0.11%, respectively, while SLW and IAG have risen 6.8% and 13.2%.
Acacia Mining reported a near 50 percent fall in first quarter earnings on Thursday after reducing operations at its flagship gold mine in Tanzania amid a tax dispute with the government. Acacia, a unit of Canada's Barrick Gold and Tanzania's largest gold miner, said its gold production fell 45 percent in the first quarter from a year earlier to 120,981 ounces, mainly due to lower output at its flagship Bulyanhulu mine. Acacia's London-listed shares skidded 8.8 percent to 141 pence by 0919 GMT and have now tumbled more than 70 percent since Tanzania introduced a ban on concentrate exports in March 2017.
Investing.com – Gold prices were slightly higher on Thursday while the U.S. dollar steadied amidst higher U.S. 10-year treasury yield.
Acacia Mining on Thursday posted a fall in first quarter earnings after reducing operations at its flagship gold mine but stuck to its full-year production and costs targets. Acacia, a unit of Canada's Barrick Gold and Tanzania's largest gold miner, is caught up in a tax dispute with the government that forced it to reduce operations at its flagship mine last year. Gold production fell to 120,981 ounces, down 45 percent from the same quarter a year earlier, mainly due lower output at Bulyanhulu.
Crude oil markets rally to get on Wednesday, as we continue to show signs of strength. Part of the reason of course is the concern about tensions in the Middle East, and I think that ultimately, we will find reasons to go higher, at least in the short term.