This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

S&P: Lower Gold Prices Could Pressure Miners

NEW YORK (AP) â¿¿ Mining companies may be faced with difficult decisions about operations if gold prices retreat suddenly from recent highs, said a Standard & Poor's analyst Tuesday.

Lower gold prices could lead miners to curb new projects, close down expensive operations or cut dividend payments to investors, said Standard & Poor's Rating Services credit analyst Elad Jelasko.

The price of gold has risen nearly 11 percent this year, ending Tuesday at $1,734.90 per ounce on the New York Mercantile Exchange. The price of gold has climbed because some investors worry about inflation resulting from moves by the Federal Reserve to stimulate the economy. They consider investing in gold protection against rising prices.

The increase in gold prices has helped protect miners from rising costs for their own materials and higher investments in mines.

But that could reverse course suddenly, as gold prices tend to be volatile, Jelasko said.

If gold prices drop suddenly, large gold miners could "cope" for a year to 18 months, Jelasko said, as they have enough access to credit and low debt levels. But sustained low prices would lead to tough decisions for miners, including delaying mine projects.

Shares of major gold miners edged up Tuesday.

â¿¿ Barrick Gold Corp. rose 8 cent to close at $39.46. Shares have dropped 13 percent this year.

â¿¿ Freeport-McMoRan Copper & Gold Inc. added 33 cents to $39.93, and is up 8.5 percent this year.

â¿¿ Newmont Mining Corp. increased 64 cents to $52, and is down 13 percent in 2012.

â¿¿ Goldcorp Inc. gained 13 cents to $42.29, and has lost 4.4 percent this year.
Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs