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Top Stories This Week: Gold Gets Back Above US$2,000, Major Miners Share Results
Feb. 23, 2024 02:00PM PST
Gold rose back above US$2,000 per ounce this week. Meanwhile, major miners Newmont and First Quantum shared their latest quarterly and annual results.
The gold price was back above US$2,000 per ounce this week after briefly dipping below that level last week.
Wednesday (February 21) brought the release of the US Federal Reserve's latest meeting minutes, which shed light on the central bank's outlook ahead of its next meeting, which is scheduled to run from March 19 to 20.
Investors are waiting for the Fed to cut interest rates, but the statement confirms that officials want to see more evidence that inflation is headed toward their 2 percent target before they do so. In fact, most participants are more concerned about cutting rates too quickly vs. hurting the economy by keeping rates higher for longer.
Last week's consumer price index reading, which came in hotter than anticipated, underscores why the Fed is reluctant to reverse course on rates too soon, and it seems that most market watchers expect it to hold steady in March — CME Group's (NASDAQ:CME) FedWatch tool shows only a 4.5 percent chance of a cut at that time.
Officials do seem keen to discuss the Fed's balance sheet at the upcoming meeting, with the aim of eventually looking to slow the pace of runoff. In the more immediate future, keep an eye out for the latest US personal consumption expenditures (PCE) data. The PCE price index is the Fed's preferred measure of inflation and is due out on February 29.
Newmont and First Quantum share results
This week also saw a number of major miners release their latest quarterly and annual results.
Newmont (TSX:NGT,NYSE:NEM) beat analysts' quarterly profit expectations, but took a hit as it recorded a US$1.9 billion impairment charge, US$1.2 billion of which was connected to a writedown at its Peñasquito mine in Mexico. Investors were also reportedly disappointed with the company's 2024 gold production forecast of 6.9 million ounces.
The company completed its acquisition of Australia's Newcrest Mining this past November, and is now looking to hone its focus on what it describes as "tier one assets." With that goal in mind, Newmont is looking to divest six non-core properties: Akyem, Cripple Creek and Victor, Éléonore, Porcupine, Musselwhite and Telfer. The company also said it expects to divest the Coffee project in Canada and the Havieron project in Australia.
Meanwhile, First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) said that in Q4 its net loss attributable to shareholders came to US$1.45 million, or US$2.09 per share. The company's future has been up in the air since Panama ordered it to close the Cobre Panama mine back in November, but alongside this week's results release it revealed a large financing package — First Quantum plans to sell US$1 billion in stock and raise US$1.6 billion from a notes offering. Company shares reacted positively to the news, but remain substantially lower than they were prior to Cobre Panama's closure.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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