Hedge funds slash bullish wagers on gold over Trump election win
The precious metal has fallen about 8% from a record high on Oct. 31, with losses accelerating after Trump’s election victory last week.
Newmont Corp and Barrick Gold Corp, the top two gold miners of the world, are expected to post higher quarterly profits, powered by a rally in the precious metal’s prices.
Rising hopes of a US interest rate cut in September, uncertainty around US elections and global geopolitical risks have boosted bullion’s safe-haven appeal, pushing it to a record-high level.
“We are expecting a very strong second quarter, given the significant increase in the gold price and relatively flat cost expectations,” analysts at brokerage TD Cowen said.
During the April-June quarter, spot gold averaged $2,335.87 per ounce, 18% higher than the same period last year.
NYSE Arca Gold Miners Index, which tracks the gold-mining industry, has risen about 20% so far, versus a 16.5% rise in the benchmark S&P 500.
As commodity prices remain strong, the market will be watching for mining companies to demonstrate stability in production and costs in the quarter and discipline and rationality in their growth plans, BMO Capital Markets analyst Jackie Przybylowski said.
Barrick, in its quarterly production snapshot last week, said it expects its gold and copper output to progressively increase each quarter through the year with a higher weighting in the second-half.
It cited the ramp-up of the Pueblo Viejo project expansion in Dominican Republic and improvements at Nevada Gold Mines for the outlook.
With costs holding steady, second-quarter margins (Barrick) are set to benefit from an increase of about $250 per ounce in gold prices sequentially, and anticipate a meaningful operational improvement in the third-quarter, said analysts at Jefferies.
Newmont is traditionally weighted to second-half due to weather impacts, Przybylowski said.
The top miner is expected to report 1.56 million ounces gold production for second quarter, nearly 26% higher than last year, according to LSEG data.
Newmont is expected to report quarterly results on Wednesday, while rival Barrick Gold is scheduled for August 12.
| Company | LSEG Q2 EPS estimate | LSEG Q2 All-in sustaining gold cost estimate |
| Newmont | 62 cents per share | $1,513 an ounce |
| Barrick Gold | 28 cents per share | $1,505 an ounce |
(By Arunima Kumar; Editing by Saumyadeb Chakrabarty)
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Omangoldprices
The recent rally in gold prices is set to boost profits for Newmont Corp and Barrick Gold Corp, the world’s top two gold miners. Analysts expect strong second-quarter results due to higher gold prices and stable costs. Both companies anticipate increased production in the second half of the year, with Newmont projected to report a 26% year-over-year increase in gold production. Investors will be watching for continued stability and growth in their operations.