Gold contracts for December delivery are up 0.69% to $1,140.30 an ounce on the Comex today, reversing yesterday's decline.
Prices for the yellow metal are rising as investors anticipate the Fed raising interest rates in the near future, according to the Wall Street Journal.
"Gold has been closely tracking changes in Fed policy expectations of late and we expect this influence on price action to continue up ahead," said a UBS analyst, according to the Journal.
A rise in U.S. interest rates would potentially spur an increase the value of the dollar, which would cause gold to fall as the commodity is priced in dollars.
Insight From TheStreet Ratings Team:
TheStreet's David Peltier recently commented on Yaman's stock in his Stocks Under $10 blog. Here is what Peltier had to say about Yamana, which is listed as one of the stocks he would buy at current quotes:
This gold-and- copper exploration company operates seven mines and several ongoing development projects in Brazil, Argentina and Chile. The shares dropped 14% this week, along with the underlying price of gold. We believe that management can boost core production and cut costs in the coming quarters.
TheStreet Ratings team rates YAMANA GOLD INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate YAMANA GOLD INC (AUY) a SELL. This is driven by multiple 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- YAMANA GOLD INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, YAMANA GOLD INC reported poor results of -$1.35 versus -$0.59 in the prior year.
- 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 254.9% when compared to the same quarter one year ago, falling from $5.10 million to -$7.90 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, YAMANA GOLD INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $121.80 million or 17.98% when compared to the same quarter last year. Despite a decrease in cash flow YAMANA GOLD INC is still fairing well by exceeding its industry average cash flow growth rate of -41.97%.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 77.26%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 150.00% 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.
- You can view the full analysis from the report here: AUY Ratings Report