360° Coverage : Gold Fades To Three-Year Low As Miners Continue Losing Steam

2 Updates
Gold Fades To Three-Year Low As Miners Continue Losing Steam
Photo Credit: Forbes Business

Gold Fades To Three-Year Low As Miners Continue Losing Steam

Dec 19 2013, 4:10pm CST | by

Has gold officially lost its luster? The precious metal, which has gotten battered in the markets and is down nearly 29% in the trailing twelve months, hit a three-year low Thursday afternoon while...

Filed under: news

 
 
 

43 weeks ago

Gold Fades To Three-Year Low As Miners Continue Losing Steam

Dec 19 2013, 4:10pm CST | by

Has gold officially lost its luster? The precious metal, which has gotten battered in the markets and is down nearly 29% in the trailing twelve months, hit a three-year low Thursday afternoon while shares of its producers — gold miners like Barrick Gold, AngloGold Ashanti and Newmont Mining Corporation — continued their market descents.

The price of gold futures trading on the Comex division of the New York Mercantile Exchange, which began tumbling as news of a modest Fed taper sent stocks soaring, fell below $1200 an ounce Thursday afternoon, eventually settling at $1,193.60 an ounce. This marks the lowest closing price for gold futures since August 2010. In the course of the trading day Thursday the price of gold fell as low as $1,190 an ounce, its lowest intraday price since June.

Gold miners have also gotten hammered since Bernanke announced the Fed would taper its monthly bond-buying program to $75 billion per month, down from $85 billion per month. The news was welcome for the stock market, because the modest decrease in bond buying likely means a continuation of easy money policies in 2014. This is good for stocks, but bad for gold, which is seen as a safe haven when the markets are volatile. And for shares of gold miners, which trades alongside gold, the news is just as bad.

Miner Barrick Gold closed at $16.58 per share Thursday afternoon, a 1.95% loss for the day. Year-to-date, it has taken a 52.4% beating. Newmont Mining Corporation closed 1.64% lower as its year-to-date loss ticked to 50.7%. And South African competitor AngloGold Ashanti took a 2.66% hit Thursday; year-to-date it has taken a whopping 62.8% dive. SPDR Gold Shares, the gold-backed ETF, saw a 2.4% decline; its 27% year-to-date loss is closer to that of the commodity than shares of gold mining companies.

IAMGOLD, which earlier in December announced that the price of gold was too low to maintain a dividend, was down 2.1% for the day. Since it announced the indefinite suspension of its dividend, the stock is down 13%. Year-to-date the miner has lost 71.7% of its value.

Scott Carter, CEO of Lear Capital and an expert on gold, said in a phone interview Thursday afternoon that he isn’t surprised to see gold futures and gold miners tumbling in the face of the news, but added that there are other factors hitting the metal this year, like high business expenses and labor costs. It costs $1,250 to produce an ounce of gold, he said, so gold is in “oversold” territory and it’s getting harder and harder to get good value from the gold extracted from the ground. This, in turn, is bad for the shares of companies like Barrick and Newmont.

“This is a very difficult time for mining stocks. It’s a tough time for a mining stock to be a part of a portfolio,” Carter said. And in order to rebound, “gold will have to retake $1,250 an ounce,” he said. “We’ll have to recapture that level and build a base there before we can move forward.”

However, Carter predicts better times for gold ahead, because he believes that the economy isn’t quite as strong as the Fed and the equity markets may claim. “Without the Fed, I think this economy is really weak,” he said. “We still need interest rates low. If the Fed is going to stay in economy, that backdrop is very bullish for gold and silver, and that will eventually break into the price of gold.”

Source: Forbes Business

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 20,000 by 30 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and MH17" hits home. ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Non-smokers face major health risks in smoking homes
London, Oct 21 (IANS) Living with smokers is as bad as living in smoke-free homes in heavily polluted cities such as Beijing or London, researchers said.
 
 
Finally Nepal, India sign power trade agreement
Kathmandu, Oct 21 (IANS) Nepal and India here Tuesday formally signed a landmark power trade agreement (PTA), allowing exchange of electricity, which is expected to open up new vistas of cooperation in the hydropower sector between the two energy-starved nations.
 
 
Depressed people, too, believe in brighter future
Toronto, Oct 21 (IANS) Like most adults, even depressed people believe in a brighter future, but for them this optimistic belief may not lead to better outcomes, found a research.
 
 
Indian-origin sisters develop tool to detect lung, heart disease
Washington, Oct 21 (IANS) Two Indian-origin high school students Ilina and Medha Krishen have developed screening tools to detect lung and heart disease using electronic stethoscopes.
 
 
 

Latest from the Network

1,074 new dengue cases in Chinese province
Beijing, Oct 18 (IANS) China's Guangdong province has reported 1,047 new cases of dengue fever, health authorities said Saturday. Six people have already died in Guangdong -- five in Guangzhou and one in adjacent...
Read more on Business Balla
 
Blake Lively 'always' wanted to be mum
Blake Lively has ''always'' wanted to be a mother. The 27-year-old actress is expecting her first child with husband Ryan Reynolds and she admits she's been dreaming of this moment since she was a youngster. Speaking...
Read more on Celebrity Balla
 
Kris Jenner 'torn apart' by Bruce's new relationship
Kris Jenner feels ''torn apart and angry'' that Bruce Jenner is dating her former assistant. The 58-year-old matriarch split from the 64-year-old Olympic gold medalist last October following 22-years of marriage but is...
Read more on Celebrity Balla
 
Cheryl Fernandez-Versini won't move to France
Cheryl Fernandez-Versini doesn't want to move to her husband's home country of France. The 'X Factor' judge, 31, who comes from Newcastle, is adamant she won't be relocating any time soon to suit her new spouse Jean-...
Read more on Celebrity Balla
 
Lance Bass sets wedding date
Lance Bass has set a date for his wedding. The former *NSYNC singer and his partner Michael Turchin, who have been dating for two-and-a-half years, are to tie the knot on December 20, 2014, a representative for the...
Read more on Celebrity Balla
 
Nepal avalanche toll reaches 39
Kathmandu, Oct 18 (IANS) At least 39 climbers died while hiking on a key Nepali route after it was hit by a major snowstorm and avalanches earlier this week, BBC reported Saturday citing officials. Over 350 stranded...
Read more on Politics Balla
 
Jake Gyllenhaal says society is complicit in 'nightcrawling'
Jake Gyllenhaal says almost everybody in society ought to relate to his new movie 'Nightcrawlers'. The eagerly-awaited film concerns those people who monitor police scanners and then race to crime scenes to film eye-...
Read more on Movie Balla
 
India eves look for first win in AFC U-16 qualifiers
Dhaka, Oct 18 (IANS) India will hope to register their first win of the 2015 Asian Football Confederation (AFC) Under-16 Women's Championship qualifiers when they take on hosts Bangladesh in a crucial encounter at the...
Read more on Sport Balla
 
Moyes mulling return to management
London, Oct 18 (IANS) Former Manchester United manager David Moyes said that he is ready to revive his managerial career six months after being sacked by the 'Red Devils'. "I am ready to return. I have enjoyed the...
Read more on Sport Balla
 
Ebola fears loom over Ghana hosting AFCON
Accra (Ghana), Oct 18 (IANS) The Ghana Medical Association (GMA) cautioned the government Saturday against hosting the 2015 African Cup of Nations (AFCON), despite a request by the Confederation of African Football (...
Read more on Sport Balla