Gold prices pulled back on Thursday. This came as more news was released about proposed vaccines coming to market sooner than later. For most of this week, attention has been focusing on Moderna and its formidable phase 1 results. Silver prices did touch another 11-month high overnight and are closing in on $20. But once the normal session was underway, things shifted to the downside.
Jobs numbers came out in the morning. But it was European Central Bank policy updates that triggered a bit of selling in some precious metals. The ECB is going to keep its policy changes on hold. However, a continuation in concerns over mounting cases of the coronavirus and their impact on economic recovery limited bullion’s decline.Where Will Gold Stocks Head Next?
Basically we’re looking at another dip in this latest channel for gold prices. How have gold stocks faired? For the most part, most mining stocks mimicked metals prices on Thursday. Does this mean it’s the end of the gold trade? In my opinion, that’s not likely. We’ve seen how gold, in particular, has ebbed over the last few months.
Considering that gold futures prices have continued to hold well-above major moving averages including its 50 Day Average (sitting at $1,751), the trend appears to be intact. However, it’s worth saying that there may need to be another news event to see if gold makes another leg higher.
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Needless to say, gold is trying to find a home around $1,800 right now. In light of this it is the highest price levels traded at since 2011. Diego Parrilla heads the $450 million Quadriga Igneo fund. Parrilla explained that unprecedented monetary stimulus is fueling asset bubbles and corporate debt addiction. This, he said, is rendering interest-rate hikes impossible without an economic crash. Parrilla’s expectation is high for gold as well. He thinks it could rise to $3,000 to $5,000 an ounce in the next three to five years.Gold Stocks To Watch: Barrick Gold
On Thursday, Barrick Gold (GOLD Stock Report) reported preliminary second-quarter results and production targets:
Preliminary second-quarter sales of 1.22 million ounces of gold and 123 million pounds of copper, as well as preliminary second-quarter production of 1.15 million ounces of gold and 120 million pounds of copper. Group gold production for the first six months of 2020 was 2.4 million ounces, at the midpoint of the Company’s 4.6 to 5.0 million ounce guided range for the year. The average market price for gold in the second quarter was $1,711 per ounce, while the average market price for copper in the second quarter was $2 .43 per pound.
Preliminary second-quarter gold production was, as previously guided, lower than the first quarter of 2020. This was mainly due to the impact of Covid-19 at Veladero in Argentina where quarantine restrictions were lifted in April and movement and social distancing restrictions slowed the remobilization of employees and contractors back to site, a planned maintenance shutdown at Pueblo Viejo in the Dominican Republic and reduced production at Porgera in Papua New Guinea as the mine was placed on care and maintenance on April 24, 2020.Gold Sales
Preliminary second quarter gold sales were in line with the previous quarter, and were higher than production in the second quarter following the start of exports of concentrate stockpiled in Tanzania . Second quarter gold cost of sales per ounce2 are expected to be 4-6% higher, total cash costs per ounce3 are expected to be 2-4% higher and gold all-in sustaining costs per ounce3 are expected to be 7-9% higher, respectively, than the first quarter of 2020.
Preliminary second-quarter copper production and sales were both higher than the previous quarter. Second-quarter copper cost of sales per pound2 are expected to be 5-7% higher than the prior quarter. C1 cash costs per pound3 are expected to be in line and copper all-in sustaining costs per pound3 are expected to be 4-6% higher, respectively, than the first quarter of 2020.
Barrick will provide additional discussion and analysis regarding its second-quarter production and sales when the Company reports its quarterly results before North American markets open on August 10, 2020.