The price of the yellow metal is moving into the red today as worries of higher U.S. interest rates in 2016 decrease the demand for gold, Reuters reports.
Gold for February delivery is declining by 0.03% to $1,059.50 per ounce on the COMEX this afternoon.
The price of the precious metal is heavily influenced by U.S. monetary policy, Reuters noted. The Federal Reserve increased U.S. interest rates for the first time since 2006 earlier this month.
"Next year too gold will be lower as U.S. interest rates will keep going higher," a bullion trader in Hong Kong told Reuters.
Barrick Gold is a gold mining company headquartered in Toronto.
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 BARRICK GOLD CORP as a Sell with a ratings score of D. This is driven by a few notable weaknesses, 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 deteriorating net income, 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 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 311.2% when compared to the same quarter one year ago, falling from $125.00 million to -$264.00 million.
- 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.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. 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.
- The share price of BARRICK GOLD CORP has not done very well: it is down 24.69% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Despite the weak revenue results, ABX has significantly outperformed against the industry average of 45.7%. Since the same quarter one year prior, revenues fell by 11.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: ABX