Gold Trends Ahead of Miner Earnings (ABX, GG, GOLD, AU, GLD)

By Douglas A. McIntyre Updated Apr 27, 10:27PM EDT · Published Jul 22, 9:05AM EDT

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Gold Image Ben Bernanke thinks the risks of inflation may be overstated or those fearing major inflation may be misguided. But that feeling is still not shared by many on Wall Street and also not shared by many on Main Street. In fact, the recent return of gold prices off the $900 mark to almost $950 and the return of oil back close to $65.00 per barrel have many wondering if that higher Producer Pricing Index data from June could get a repeat either in July or in August. Our guess is August rather than July, but there is still almost two trading weeks left in the month of July. We have earnings coming from some majors in the next week and wanted to evaluate those trends for Barrick Gold (NYSE: ABX), Goldcorp (NYSE: GG) Randgold Resources Limited (NASDAQ: GOLD), and Anglogold Ashanti Limited (NYSE: AU). The SPDR Gold Shares (NYSE: GLD) of course offer the most direct investment in bullion without the operational risks tied to individual companies.

One of our affiliates has recently caught a buy signal on gold with the call for it to challenge recent highs and possibly put in new highs. They have a full audio/video presentation on this showing the trends and stops.

Randgold Resources Limited (NASDAQ: GOLD) is soon to be on the earnings deck. With shares down 0.5% at $65.12 in early trading, its 52-week range is $22.28 to $74.21. It recently announced a combination with Moto Mines. This one has thin coverage, but the handful analysts are calling for $0.25 EPS.

Barrick Gold (NYSE: ABX) is on deck next week with earnings. Shares this morning are down 0.7% at $35.15 in light trading, and the 52-week range is $17.27 to $49.62. We have a large consensus group calling for roughly $0.38 EPS and $1.9 billion in revenues.

Goldcorp (NYSE: GG) is also on deck for earnings next week. Shares are down 0.35% at $37.45 this morning, and the 52-week range is $13.84 to $46.88. We have a consensus estimate of $0.15 EPS and almost $575 million in revenues.

All of those estimates are consensus estimates from Thomson Reuters. Be advised, those are likely to change handily before the actual earnings dates a week out.

SPDR Gold Shares (NYSE: GLD) is down 0.3% at $92.80 in early trading, and its 52-week trading range is $66.00 to $98.99. This offers the easiest and most direct way for Joe Public to play the price moves in gold, but it also has the largest wild card. With the CFTC looking at curbing energy commodity speculation vehicles, what do you think could happen when they see the $33 billion market cap. The “GLD” is larger by direct bullion holdings than all but a few of the world’s central banks.

A small example of how profitable gold can be for some of the companies mining the shiny yellow stuff, a smaller Canadian traded company called Gammon Gold said this morning that its cash costs for production come to roughly $445 to $465 per ounce. At over $900 or anywhere near, those are some nice margins if you just look on the surface.

We’ll be paying attention to the prices of gold here as a barometer for earnings and production targets from the major miners and producers next week.

Jon C. Ogg
July 22, 2009

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.