Gold futures for December delivery were up 1.26% to $1,180.50 an ounce on the Comex mid-day Wednesday.
The Fed is expected to release a statement about U.S. interest rates at 2 p.m. EDT after the conclusion of its Federal Open Market Committee meeting. Some investors believe the U.S. central bank will keep interest rates near zero due to recent weak economic reports, according to The Wall Street Journal.
Fed policy makers recently commented that the decision to raise rates will be based on economic data showing the U.S. economy is strong enough to handle higher borrowing costs, according to the Journal.
"The market has accepted the idea that the Fed is ready to move if the data warrants it, but the data has not warranted it," said Dave Meger, director of metals trading with High Ridge Futures, told the Journal. "At the end of the day the market doesn't believe that the criteria [for a rate increase] is going to be met."
Gold performs better in low interest rate environments as the yellow metal does not offer a yield.
Barrick Gold is a gold producer based in Toronto with operations in Canada, the U.S., Peru, Argentina, the Dominican Republic, and Papua New Guinea.
TheStreet Ratings team rates BARRICK GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate BARRICK GOLD CORP (ABX) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio of 1.26 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- ABX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 43.32%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- Despite the weak revenue results, ABX has significantly outperformed against the industry average of 46.5%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 41.46% is the gross profit margin for BARRICK GOLD CORP which we consider to be strong. Regardless of ABX's high profit margin, it has managed to decrease from the same period last year.
- You can view the full analysis from the report here: ABX