I think the rise in the XAU yesterday had something to do with this:
cbs.marketwatch.com hoo&dist=yhoo
Newmonts' stellar earnings lift sector
NEW YORK (CBS.MW) -- Gold stocks glittered Thursday as the largest gold producer in North America helped lift the sector with its strong quarterly earnings.
Denver based Newmont Mining made $46.8 million, or 30 cents a share, in the fourth quarter, vs. $7.6 million, or 5 cents a year earlier. Analysts had projected a profit of 16 cents, according to First Call.
What investors had their eyes on was Newmont's significant increase in gold reserves, up 4 million ounces, or 8 percent, to 56.6 million ounces at the end of 1999.
"The most important item in Newmont's release was the mix of reserves that increased in quality," said Daniel McConvey, gold equity analyst at Goldman Sachs & Co.
Newmont is the first gold producer to report quarterly earnings and in the next several weeks the rest of the group, most breaking below their 52-week lows, is set to report.
Newmont (NEM: news, msgs) shares gained 1 13/16, or 9.2 percent, to 21 7/16. Hecla Mining (HL: news, msgs) rose 3/16 to 1 1/2; Barrick Gold (ABX: news, msgs) jumped 11/16, or 4.2 percent, to 16 15/16 and Coeur D'Alene Mines (CDE: news, msgs) increased 1/2, or 16 percent, to 3 5/8.
McConvey said that gold stocks have been beaten up over the past few weeks and that the market is oversold.
The 17 percent increase in gold prices from the third to the fourth quarter, from $250 an ounce to $296 also had a positive impact on Newmont's results because the company hasn't hedged itself against the long-term decline in gold prices as much as its competitors. |
