|Bid||0.00 x 4000|
|Ask||0.00 x 1800|
|Day's Range||8.89 - 9.22|
|52 Week Range||6.13 - 20.50|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||-1.62|
|Expense Ratio (net)||0.93%|
On Friday, inflation data met expectations, which kept the U.S. dollar in check and allowed leveraged gold ETFs like the Direxion Daily Jr Gld Mnrs Bull 3X ETF (JNUG) and Direxion Daily Gold Miners Bull 3X ETF (NUGT) to post gains. The consumer price index for December came in line with expectations--down 0.1 percent from November and up 1.9 percent, year-on-year--marking the first decline in nine months. “Overall, inflation risks remain well in check and are well down the list of potential concerns for both the capital markets and the economy,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
Is Barrick Worth a Look after Its Merger with Randgold? (Continued from Prior Part) ## Factors affecting Barrick’s estimates Barrick Gold (GOLD) significantly outperformed its peers in 2018. Its stock performance improved after the announcement of its merger with Randgold Resources. Most analysts are positive about the new company’s prospects following the merger. However, they’re waiting for the combined entity’s execution on its stated priorities and its resolution of other matters, such as its Tanzanian tax issues. ## Analysts’ revenue estimates Wall Street analysts expect Barrick to see revenue of $7.3 billion in 2018, implying a 13.0% fall YoY (year-over-year). The company expects its production to fall 11.0% between 2017 and 2018. This expected fall in production has been the main driver of analysts’ lower revenue estimates for the company in 2018. For 2019 and 2020, however, analysts expect Barrick’s revenue to rise 11.9% and 1.0%, respectively, due to the merger of Barrick and Randgold. Prior to the merger, Barrick’s revenue profile was on the decline. Among Barrick’s close peers (GDX) (JNUG), Newmont Mining (NEM), Goldcorp (GG), Agnico Eagle Mines (AEM), and Kinross Gold (KGC) have strong production growth profiles. ## Earnings estimates Analysts expect rather impressive growth in EBITDA for Barrick post-2018 due to merger synergies. While the company’s expected EBITDA for 2018 is $2.97 billion, implying a fall of 26% YoY, its growth in 2019 and 2020 is expected to be 11.1% and 10.2%, respectively, higher mainly due to the expectation of cost improvements in the new company. Continue to Next Part Browse this series on Market Realist: * Part 1 - Is Barrick Worth a Look after Its Merger with Randgold? * Part 2 - Will the GOLD Merger Expedite the Tanzania Dispute’s Resolution? * Part 3 - Barrick Could Emerge Leaner and Stronger after an Asset Review
Is Barrick Worth a Look after Its Merger with Randgold? The merger of Barrick Gold (GOLD) and Randgold Resources will be a step toward improving the combined entity’s shareholder returns. To achieve these returns, the new Barrick will undergo a critical review of its asset base and decide whether to dispose of some of its assets.
Gold ended 2018 on a torrid pace, lifting shares of miners and the related exchange traded funds (ETFs) in the process. The MVIS Global Junior Gold Miners Index (MVGDXJTR), a widely followed benchmark ...
Is Gold Ready to Fly in the New Year?(Continued from Prior Part)The US dollar and the Fed’s approach Like the Fed’s policies, the strong US dollar (UUP) impacted gold prices (GLD) this year. Key factors supporting the dollar this year were the Fed’s interest rate hikes and outlook, trade war concerns, and US markets’ (SPY) (QQQ) outperformance of other markets.
Bulls versus Bears on Wall Street: Time to Buy Gold in 2019? Unlike other banks, BNP Paribas has a negative bias for gold going into 2019. Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas, is negative on gold (SGOL)(GLD) and other precious metals (JNUG) in 2019 and prefers holding Treasuries (TLT) to gold and silver.
Bank of America Merrill Lynch (BAML) is overweight on precious metals going into 2019. In its preview for 2019, BAML strategist Michael Widmer and his team noted that the market is close to extremely bearish on the metal. BAML uses four variables to forecast gold prices (GLD)(JNUG): the US dollar (UUP), US real interest rates (TLT), cross-asset volatility (VIX), and oil prices (USO).
For a large part of the year, gold prices (GLD) have languished due to a strong US dollar (UUP), hawkish Fed rate hike outlook, and rising equity markets. For the last few months, though, some of these factors seem to be reversing their course. Equity markets, for one, have remained quite fragile and volatile (VIX) since October. As of December 24, the S&P 500 (SPY), the Dow Jones Industrial Average (DIA), and the NASDAQ Composite (QQQ) have lost 18.9%, 16.1%, and 21.6%, respectively, since hitting their highs in mid-September.
For most of the year, gold prices (GLD) have languished, thanks to a strong US dollar (UUP), hawkish Fed rate hike outlook, and strength in the equity markets. For the last few months, though, some of these factors seem to be reversing course. Equity markets, for one, have remained quite fragile and volatile (VIX) since October.
Mad Money host Jim Cramer has been feeling “powerless” lately. After the Fed’s 25-basis-point rate hike (AGG) and less-dovish-than-expected tone on December 19, Cramer said that Powell was ignoring “serious” weakness in the US economy. In This, Not the Rate Hike, Spooked the Markets Yesterday, we mentioned that the equity markets (IVV) tanked on December 19 after the rate hike and the Fed’s outlook, and it continued in free fall mode yesterday.
Could Market Risks Bring Investors Back to Gold in 2019? As we’ve discussed in this series, market uncertainty is increasing after an unusually calm 2017 and part of 2018. The major sources of uncertainty are expected to be the looming trade war between the United States and China (FXI), the coming earnings and margins deceleration, the Brexit deal, and the Fed’s policy path.
Could Market Risks Bring Investors Back to Gold in 2019? The yield curve tracks the yields of Treasury securities maturing at different times. The narrowing gap between these yields is sometimes called a “flattening yield curve.” If shorter-term security yields become larger than longer-term security yields, that’s called a “yield curve inversion” (BND).
Could Market Risks Bring Investors Back to Gold in 2019? The key factors supporting the greenback in 2018 have been the Fed’s interest rate hikes and outlook, trade war concerns, and the outperformance of US markets (SPY)(QQQ). The Federal Reserve has already raised rates three times this year, and it’s expected to raise them for a fourth time in December.
On November 20, Jeffrey Gundlach told Reuters that investors haven’t shown an appetite for Treasuries (TLT) even though US stock markets have fallen. He said, “Obviously, it is not a deflationary bear market, otherwise you would have a bond rally.” Gundlach also advised investors to stay out of investment-grade bonds. Gundlach is concerned that the selling pressure in the US stock markets (IVV) (QQQ) wasn’t accompanied by higher volatility (VIX). Investors should note that the drop on December 4 was also accompanied by higher volumes and volatility.
As we’ve discussed in this series, market uncertainty is increasing. Looming earnings deceleration, trade policy uncertainty, and the Fed’s tightening have been major factors weighing on investors’ minds. For most of this year, gold (GLD) has not been a safe-haven asset, as the US dollar (UUP) (USDU) has continued strengthening and the Fed’s rate hike outlook has remained strong.
In the previous article, we looked at analysts’ ratings for senior gold mining companies. In this article, we’ll look at analysts’ estimates for those companies’ (GDX) (JNUG) revenues going forward.
Which Gold Miners Have Shown Upside Potential since Q3? After making discretionary cuts on exploration and capex for many years, gold miners (GDX) (JNUG) have started to refocus on production growth. Newmont Mining (NEM) has approved eight projects since mid-2014.
Could Gold Be the Best Bet amid Increased Economic Uncertainty? The Fed’s interest rate hikes and outlook, trade war concerns, and the better US market (SPY) (QQQ) performance have been the key factors behind the dollar’s strength. The Federal Reserve has already raised the rates three times this year and is expected to raise them for the fourth time in December.
Yamana Gold’s (AUY) by-product AISC (all-in sustaining costs) for the third quarter were $739 per unit in gold equivalent ounces. Yamana Gold is guiding for by-product AISC of $725–$745 per gold equivalent ounce for 2018. During the conference call, Yamana Gold mentioned that while it isn’t updating the unit cost guidance, it’s providing directional information. The company expects its fourth quarter to have the highest production in the year with an anticipated improvement in unit costs.
By October 17, Agnico Eagle Mines (AEM) has lost 20.3% of its value YTD (year-to-date), while the VanEck Vectors Gold Miners ETF (GDX) had fallen 14.3%. Among senior and intermediate miners (GDX)(GDXJ), Newmont Mining (NEM), AngloGold Ashanti (AU), Barrick Gold (ABX), and Goldcorp (GG) have performed better than AEM. Agnico Eagle is known to deliver consistent results throughout its cycles.
Gold bugs, pull the gold bar out from beneath your mattress and admire its luster as the precious metal's price catches a bid. As of Oct. 23, gold futures for December 2018 are up 2.4% for the month, with several analysts predicting further gains. "We have a bullish outlook through the end of the year and into next year," said Jim Steel, chief precious metals analyst at HSBC, as reported in a CNBC article. Gold prices are likely to be supported in the near term by improved emerging market physical demand and short covering during periods of equity market volatility.
Of the analysts covering Kinross Gold (KGC), 42.0% recommended a “buy” and 58.0% recommended a “hold.” Ratings for the stock haven’t changed much in recent months. Its target price of $4.56 suggests a potential upside of 63.0% based on its current market price.
Usually, gold miners are a leveraged play on gold prices, meaning that when gold prices rise, gold miners outperform the underlying commodity, and vice versa.
With gold prices tumbling this year, gold mining equities and the related exchange traded funds are enduring significant punishment. This year, the loss incurred by the largest gold miners ETF is more than double that of the biggest physically-backed gold ETF.
Eldorado Gold (EGO) stock has seen rapidly deteriorating analyst sentiments in the past year. Currently, only 17% of the 13 Wall Street analysts covering the stock rate it a “buy.” That stands in sharp contrast to the ~50% “buy” ratings it had almost a year ago. Eldorado stock has lost 38.4% of its value year-to-date as of September 24.