Gold stocks jump as Barrick reports Q4 production increase

gold prices

While growth stocks and growth indexes like the Nasdaq continue to tumble, we’re seeing the opposite activity right now in historic safe assets. In particular, precious metals have done fairly well ever since 2022 began. Gold prices have slowly inched up to above $1,800, although far from the $2,000 per ounce many had expected last year. However, gold mining stocks are doing incredibly well in this current environment, with many miners jumping on Wednesday after Barrick Gold (NYSE: GOLD) reports its Q4 results.

Barrick Gold is one of the largest gold miners in the world, and its results are often used as a barometer for the state of the precious metal mining industry. Additionally, smaller gold stocks typically rise and fall by association, depending on whether there was any good or bad news to report. That’s what happened on Wednesday, where Barrick gold managed to impress most of Wall Street.

The company reported that overall production during its fourth quarter was up 10% compared to just three months ago. Strong performance from both its Carlin and Cortez mines, some of Barrick’s top-performing assets, helped push up this quarter’s numbers. Full-year production came in at 4.4 million ounces, within Barrick’s overall guidance targets, but slightly below the 4.8 million ounces seen back in 2020.

Analysts were also impressed by Barrick’s expenditures. All-in sustaining costs, a crucial metric used in determining mining profitability, fell by 6% compared to the previous quarter. That’s considering a remarkable improvement for a senior mining company, although these costs do vary a lot from quarter to quarter.

Barrick also reported that its copper production for the year would come in at 415 million pounds, once again within guidance targets. Copper prices are currently trading at multi-year highs as industrial demand in China continues to push up demand. There’s also a critical shortage of new copper deposits being found right now, which is also playing a role in this copper bull market.

Shares of Barrick Gold were up by over 8.7% in response to the news. However, Barrick wasn’t the only gold company to report similarly promising results on Wednesday. Gold Resources (NYSE: GORO), a small-cap gold miner, also shot up over 9.6% after reporting a higher-than-expected fourth-quarter production rate as well. The company produced over 22.6 thousand ounces of gold and 1.06 million ounces of silver during Q4. Analysts are now expecting that other gold miners are now expected to see similarly strong results.

Even if gold prices don’t move much higher, gold miners are expected to continue to do well. Investors that want to play the gold market often buy gold stocks instead, due to the fact that they can see consistent growth as long as they are profitable. In contrast, owning physical bullion typically doesn’t see much in the way of returns.


Barrick Gold Company Profile

Based in Toronto, Barrick Gold is one of the world’s largest gold producers, operating mines in North America, South America, Australia, and Africa. In 2020, the firm produced nearly 4.8 million attributable ounces of gold and nearly 460 million pounds of copper. As of Dec. 31, 2020, Barrick had 68 million ounces and 13 billion pounds of proven and probable gold and copper reserves, respectively. – Warrior Trading News