For investors, a positive result for the US employment market on Friday will likely restrain further speculation that the Federal Reserve will initiate additional quantitative easing, a prospect that is considered a catalyst for gold appreciation.
Supply concerns could support gold price growth
Nancy Curtin, Chief Investment Officer for Close Brothers Asset Management
gold price volatility with CNBC, commenting, “if you look at the gold market a lot of the speculative interest has come out. It is actually basing quite nicely. We would like to see a close over $1,690 [per troy ounce] to begin to indicate a more positive trend. All these earnings [reports] indicate production problems. Production problems mean less gold on the market. Less gold on the market is supportive of the gold price.”
Barrick Gold Corp.
first quarter adjusted earnings per share of $1.09, slightly below
consensus estimates of $1.11. The company benefited from a 22 percent increase in gold prices as well as better copper
sales. Barrick is reviewing
cost estimates for its $5 billion Pascua-Lama gold and silver
project on the border of Chile and Argentina because of inflationary impacts on labor and materials. On a positive note, Barrick raised its dividend by 33 percent to $0.80 per year and maintained its full-year guidance of between 7.3 million and 7.8 million troy ounces of gold and between 550 million and 600 million pounds of copper.
Yamana Gold Inc.
its first quarter results, which included adjusted earnings of $0.25 per share. Top line revenue increased 18 percent to $560 million from $476 million during the first quarter of last year. Yamana anticipates production targets for the year to be in the range of 1.2 million to 1.3 million gold equivalent ounces, a 13 percent increase from last year.
construction of the El Morro gold and copper mine following the rejection of the $3.9 billion project's environmental permit by Chile's Supreme Court. Earlier in the spring the company indicated that it would continue developing the project unless Chile's Supreme Court upheld a decision by the Antofagasta Court of Appeals. Non-construction work on the project is expected to continue.
Newmont Mining Corp.
have to raise the $4.8 billion budget for its Conga project in Peru after political opposition. Newmont is currently in the process of evaluating the project's economics with the potential to redistribute capital resources to other development alternatives in Nevada, Australia, Ghana, and Indonesia.
Investors will be interested in these developments as escalating costs could indicate that producers will be reassessing additional proposed projects with more careful consideration. Such attention could impact exploration budgets and merger and acquisition activity.