Mining Companies Trail below Their 100-Day Moving Averages
(Continued from Prior Part)
Retreating prices
Barrick Gold (ABX) and Newmont Mining (NEM) are the major mining giants with a global presence. These companies reported 3Q15 earnings that beat analysts’ estimates. Both companies produced more gold than expected in the third quarter, which mitigated a prolonged slide in gold’s price.
Gold and silver have slipped approximately 9.3% and 9.8%, respectively, on a year-to-date basis. Platinum and palladium have seen higher losses, comparatively. They fell 30.3% and 32.4%, respectively, on a year-to-date (or YTD) basis.
Above is a price chart that compares the performances of mining companies such as Barrick Gold, Newmont, AngloGold Ashanti (AU), and GoldCorp (GG) with the price of gold. These four companies make up 24.1% of the Market Vectors Gold Miners ETF (GDX).
The above-mentioned four companies ABX, NEM, AU, and GG have lost 42%, 7.4%, 29%, and 42%, respectively, on a YTD basis. But these mining businesses are fighting hard with the routing prices of precious metals.
Production on the rise
Barrick’s output of gold climbed to 1.66 million ounces in 3Q15, compared with 1.65 million ounces in the same quarter of the previous year. Newmont’s production jumped to 1.3 million ounces from 1.2 million over the same period.
Sales fell 12% for Barrick, but the company still beat analysts’ expectations. Newmont also beat analysts’ expectations, with sales rising to $2 billion. Barrick is also concentrating on reducing its debt burden.
Gold is almost 40% below its peak of ~$1,850 per ounce as seen in 2011. The ETF that takes its price from mining companies is the SPDR S&P Metals and Mining ETF (XME). XME has lost a whopping 49.3% on a YTD basis. With the sharp fall seen in precious metals, mining companies are facing a hard time.
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