Gold for December delivery was up 1.9% to $1,149.20 an ounce on the Comex late Monday morning.
Prices of the precious metal were rising as a result of dovish Federal Reserve minutes and declines in the U.S. stock market, according to Market Watch. Minutes from the Federal Open Market Committee's July meeting shows that some officials believe inflation is still too low to justify an interest rate increase, according to the news service.
The dovish comments helped weaken the dollar, which helped bring up gold prices by making the yellow metal cheaper to those using other currencies.
"Short-term, we think gold could rally to $1,190 before hitting much resistance," Altavest Worldwide Trading Principal and Co-founder Mike Armbruster told Market Watch. "If gold can move decisively through $1,200, then gold starts to look much more interesting."
On Wednesday Agnico Eagle announced that drilling in the first half of 2015 results in an inferred resource estimate of 2 million ounces of gold in the Whale tail deposit in its Amaruq gold project in Nunavut, Canada, a 35% increase from its December 2014 estimate.
TheStreet Ratings team rates AGNICO EAGLE MINES LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AGNICO EAGLE MINES LTD (AEM) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 15.3%. Since the same quarter one year prior, revenues rose by 16.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 48.32% is the gross profit margin for AGNICO EAGLE MINES LTD which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 1.97% trails the industry average.
- AEM's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.60%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 75.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 73.2% when compared to the same quarter one year ago, falling from $37.68 million to $10.08 million.
- You can view the full analysis from the report here: AEM Ratings Report