Gold Prices Surged For A Second Day This Week; Time To Buy?
The price of gold continued higher on Thursday. Many industry experts expect interest rates to remain lower for longer. This would be a great scenario for gold prices as they typically thrive in low rate environments. Furthermore, the jump in gold prices has become a further boon to gold stocks this week.
Where safe-haven stocks are in demand even after the subdued coronavirus fears, there’s still a strong case to support the uptrend as a result of other factors at work. If the U.S. dollar also declines, it could further boost gold prices and gold stocks.
In addition to the above, gold isn’t the only metal moving higher during the second half of the week. Prices for silver are also heading higher right now. There’ve been modest gains for stocks in the midst of this move. China announced that it would cut tariffs on some $75 billion of U.S. imports. That is set to begin next week and comes about a month after the Phase 1 deal was signed between the U.S. and China.
Barrick Gold Stock Heads Higher
On the heels of the bullish trend in the price of gold, Barrick Gold stock (GOLD – Free Report) made a move higher for the 3rd day in a row. Shares of the gold company reached highs of just over $18.30 during the morning session on Thursday.
The company is set to report earnings next week and strong performance from projects like its Nevada Gold Mines could help results assuming a strong showing during the quarter. Barrick Gold stock jumped after the company reported its preliminary 4th quarter gold production and sales figures. These were higher than 3rd quarter figures and was attributable to a strong performance at these mines.
The company produced 117 million pounds of copper during the 4th quarter and sold 91 million pounds. For all of last year, preliminary gold production came in at 5.5 million ounces. This was subsequently at the higher end of its initial guidance.
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Furthermore, other factors at play during Q4 include average realized gold prices jumping over 20% year-over-year. So, this may also become a key factor when it comes to Barrick’s results.
Are The Rumors True?
There have been constant rumors buzzing around Barrick Gold’s possible merger with Freeport McMoRan (FCX – Free Report). however, in a statement from CEO Mark Bristow, he said that the rumors are “completely wrong.” Although he is interested in the company’s Grasberg mine and expressed interest in expanding in the Pacific Rim, Bristow explained a different type of stance on the matter.
“People say, are you interested in Grasberg? I say I have to be, it’s a tier one asset. If you’re going to be a world-class gold miner, you’re going to have to accept copper. In ten years’ time the most strategic metal on this planet is copper, if you believe the EV story, and I do. Freeport is a very old company and it has bought lots of very old companies so there’s risk, rehabilitation liabilities… and also you would never want to go in a place like Indonesia without proper due diligence.”Mark Bristow
Last month Barrick inked a deal with Tanzania giving the state a 16% stake in each of the company’s 3 gold mines in the country. They also receive an equal share of the economic benefits from the mines. This was all completed to button up a long-standing tax dispute.