Gold stocks rocket as investors seek safe haven
On Thursday, the price of gold surged nearly $70 an ounce as turmoil on world financial markets and global economic fears sparked a return to safe-haven buying.
Futures contracts in New York with April delivery dates jumped 5.8% to a high of $1,263.90 an ounce in massive volumes of nearly three times usual volumes. That moved gold into a bull market with gains topping 20% from the near six-year low struck mid-December.
In early afternoon trade the metal pared some of the gains to trade at just under $1,250 an ounce, still its best level in year.
The change in sentiment towards gold evident this year has seen a huge run-up in gold mining stocks and today’s big move saw investors pile into the sector once again.
Barrick Gold Corp (NYSE:ABX, TSE:ABX) jumped as much as 9.3% with more than 25 million shares changing hands by early afternoon, surpassing already high interest this year which has turned the counter into the best performing stock on the market.
After falling to its its lowest since 1989 less than six months ago, today's surge brings Barrick's gains since the start of the year to an astonishing 63%
Barrick, which produced 6.1 million ounces of gold in 2015, was the tenth most actively traded stock on the New York Stock Exchange, attracting more buying interest than the likes of Ford Motor and Morgan Stanley.
After falling to its its lowest since 1989 in September, today's surge brings the world's top producer of the metal's gains since the start of the year to an astonishing 63%. At a market value of $14.5 billion in New York, the Toronto-based company is the most valuable gold mining company in the world.
Goldcorp (TSE:G, NYSE:GG) opened more than 9% higher before pulling back for for a market capitalization of $13 billion in New York after more than 16 million shares changed hands.
The year-to-date advance for the Vancouver-based firm is more than 30%. Goldcorp which reports full year earnings later this month is forecasting a whopping 20% production increase for 2015 at the high end of its forecast range of between 3.3m – 3.6m ounces. gold mine in the Nunavut Territory of Canada
World number two in terms of production Newmont Mining Corp (NYSE:NEM) had climbed 4.5% in afternoon trade after a stronger opening. Denver-based Newmont, the only gold company that forms part of the S&P500 index, is having a monster 2016, with a 41% rise since the beginning of the year. While others are disposing of mines, Newmont is building its portfolio and last year acquired the Cripple Creek & Victor gold mine in Colorado for $820 million in cash from AngloGold Ashanti.
Toronto's Kinross Gold with mines in Russia reaping the rewards of a weak rouble, was the best performer on the day soaring nearly 20% in morning trade
American Depository Receipts of AngloGold Ashanti (NYSE:AU), the world's third largest gold producer in terms of output, surged 7.7% for a market value of $4.7 billion on the NYSE. AngloGold Ashanti is up a stunning 63% since the start of the year and has more than doubled in value since hitting 16-year lows in August.
ADRs of Gold Fields (NYSE:GFI) soared 10.6% while its South African peer Sibanye Gold (NYSE:SBGL) exploded 15% higher. Gold Fields and Sibanye are the seventh and ninth largest gold miners worldwide in terms of ounces, but rank further down the field in terms of market value.
Gold Fields is worth a shade under $3.4 billion in New York while investors lifted Johannesburg-based Sibanye to just under $2.8 billion in market value today. Sibanye which was formed in 2012 after Gold Fields unbundled its three Witwatersrand gold mines has more than doubled in value just since the since the start of the year.
Australia's Newcrest Mining Limited (OTCMKTS:NCMGY, ASX:NCM) joined the party, jumping 5.6% for a $8.8 billion market cap. Sixth in the output ratings Newcrest is on course to produce 2.4 – 2.6 million ounces in its financial year. Newcrest mines copper and gold in Australia, Indonesia, Africa and Papua New Guinea and is a joint owner with South Africa's Harmony Gold of the giant Wafi-Golpu project in PNG.
The world’s fifth most valuable gold stock, Randgold Resources ADR's trading on the Nasdaq (LON:RSS, NASDAQ:GOLD) also caught fire trading 4.4% higher. The Africa-focused miner with a $8 billion valuation is up 42% this year. Production from its mines in West and Central Africa, reached record levels last year at eye-watering all-in cash costs of just $600 per ounce .
Toronto's Kinross Gold (TSE:K, NYSE:KGC) with mines in Russia reaping the rewards of a weak rouble, was the best performer on the day soaring nearly 20% in morning trade and holding onto most of those gains by the afternoon. Yesterday the company reported a net loss of $841 million for the final quarter of 2015 but lifted its output guidance for the year to 2.7 – 2.9 million ounces. The stock is worth $3.5 billion in New York after a 58% rise in 2016.
Agnico Eagle was trading near the day's highs in afternoon dealings, swelling its market capitalization to $7.9 billion and its year-to-date gains to more than 37.3%
Agnico Eagle Mines (TSE:AEM, NYSE:AEM) was trading near the day's highs in afternoon dealings, swelling its market capitalization to $7.9 billion in New York and its year-to-date gains to more than 37.3%.
Yesterday the company predicted payable production from its nine mines located in Canada, Finland and Mexico to reach 1.52 – 1.56 million ounces, below previous guidance, and at all-in costs of between $850 – $890 an ounce. Lower output is due to Agnico's Meadowbank mine in northern Canada deferring ounces into 2017 and 2018 for an extended mine life.
Fellow Canadian miner Eldorado Gold Corp (TSE:ELD) ran up 14.2%. The miner worth C$3.1 billion in Toronto is up a modest 3.6% since the start of the year as its mines and projects in Greece run into trouble. Yamana Gold (TSE:YRI) also gained in Toronto, jumping 9.2% for a market value of C$3.6 billion. The company produced 1.27 million ounces in 2015 with guidance for this year of 1.23 – 1.31 million ounces.