The price of the precious metal is being driven into the red by a rise in U.S. Treasury yields and a decline in the country's weekly jobless claims, both of which have dimmed investment demand for gold, MarketWatch reports.
Gold for June delivery is declining by 2.36% to $1,181.50 per ounce on the COMEX this afternoon.
Data showed that claims for unemployment benefits dropped to a 15 year low of 262,000 last week.
"Gold has been hit not just by an improvement in the jobless figures, but by the banner headline of unemployment claims at a 15 year low. Interesting to note that the last time unemployment was at these levels in April 2000, it marked the peak in the dot-com bubble. With that in mind it is counter-intuitive that gold would have been so heavily sold off," Ross Norman, CEO at Sharps Pixley, told MarketWatch.
Separately, 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 several 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 weak operating cash flow, generally disappointing historical performance in the stock itself, unimpressive growth in net income and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has decreased to $316.00 million or 45.98% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, BARRICK GOLD CORP has marginally lower results.
- The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, ABX's quick ratio is somewhat strong at 1.15, demonstrating the ability to handle short-term liquidity needs.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.46%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 37.50% 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 Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 35.2% when compared to the same quarter one year ago, falling from $88.00 million to $57.00 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, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ABX Ratings Report