The price of gold is being pushed down today due to declining oil prices and the anticipation of higher interest rates in 2016, the Wall Street Journal reports.
The precious metal has been weighed down by worries that the Federal Reserve may tighten interest rates more quickly than expected next year, the Journal noted.
For February delivery, gold is down 0.82% to $1,067.10 per ounce on the COMEX this afternoon.
"There is just not much incentive for gold buyers at the moment," Frank Lesh, a broker at Futurepath Trading told the Journal.
So far this year, gold prices have declined by almost 10%.
Gold Fields is a South Africa-based producer of gold with eight operating mines in Australia, Ghana, Peru and South Africa.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate GOLD FIELDS LTD as a Sell with a ratings score of D. This is driven by some concerns, 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.55%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 33.33% 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 change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income has decreased by 5.8% when compared to the same quarter one year ago, dropping from $19.10 million to $18.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, GOLD FIELDS LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
- GFI's debt-to-equity ratio of 0.63 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- Despite the weak revenue results, GFI has significantly outperformed against the industry average of 45.7%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: GFI