Gold Miners Barrick and Kinross Technical Review: Victims of Improving Economy?

Jan 30, 2013, 08:00 ET from

LONDON, January 30, 2013 /PRNewswire/ --

Gold and other precious commodities have their heyday in times of economic uncertainties. In the past decade, gold provided jaw-dropping returns, but lately, the returns have been much more muted. To a certain extent, the plateau in gold prices has been caused by relatively secure economic conditions. StockCall has issued comprehensive technical analysis on Barrick Gold Corp. (NYSE: ABX) and Kinross Gold Corp. (NYSE: KGC). These free reports can be accessed for free at

Stabilized gold prices are not only making investors wary of the future of gold, but are also causing trouble with gold companies, especially gold mining companies. Barrick Gold, one of the biggest gold producers in the world, declined steadily through the last year. Kinross Gold also lost its value, despite providing positive financial numbers. Register with us today and access a database of free reports including today's technical coverage of Kinross Gold at

Barrick Gold to Optimize Asset Mix

Barrick Gold Corporation stock is showing weakness. Its negative return of over 25 percent last year is also in contrast to gains shown by gold. While 2012 was not as good as 2011 for gold, this gold producer fared even worse. In 2011, gold gains were mainly driven by the uncertainty in the U.S. and global economy. However, these fears were curtailed, to a certain extent, in 2012, leading gold prices to oscillate in a rather narrow range. Prices are also likely to remain stable in the near future as has been shown by the recent gold price reaction to positive job data. Gold prices stumbled after the release of data showing lowest jobless claims in 5 years. The technical analysis report on Barrick Gold is available for free upon sign up at  

It is not just the muted prices of gold that spells troubles for Barrick Gold. The company is also dealing with rising operating costs. Irrational exuberance in gold price forced gold mining companies to take risky bets and most of these companies burnt their fingers. Barrick Gold is also attempting to optimize its asset portfolio. However, the process does not look promising as the company struggled to close out its deal for the African assets with China National Gold Group Corp. On the upside, the stock trades at Price Earnings ratio of 9.79, making it a relatively inexpensive stock in comparison to its peers. But with internal inefficiencies and pressure on gold prices, the stock is likely to remain laggard in the near future.

Kinross Struggles with Rising Operating Costs

Kinross Gold Corporation [Free Report on KGC](1) is another victim of strained gold price. Like other gold companies, Kinross is also dealing with extravagant portfolio expansions and rising operating costs. The company had to write down its Red Back Mining investment by $2.5 billion. It had paid $7 billion for the property in 2010. This write down had negative impact on the company's bottom-line.

Kinross has overall poor track record of providing return to its investors. While it offers about 2 percent dividend yield, the stock has lost about 50 percent of its value since its listing in 1981. Its margins are also shrinking due to depressed gold prices and increasing operating costs and the trend is likely to continue into the near future.

The operating inefficiencies of the gold mining companies are likely to deprive them of any benefit arising out of gold price increase.


  1. Kinross Gold Corporation Technical Analysis [ ]

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