Barrick Gold Corporation reported in-line earnings and revenue for the second quarter of 2022

Barrick Gold Corporation (GOLD) reported in-line earnings and revenue for the second quarter of 2022. Its net earnings came in at $0.27 per share. The company’s sales were $2,859 million. However, its revenue fell 6.81% year over year.

Copper production was strong and helped Barrick beat analysts’ expectations. The company’s second quarter production was 120 million pounds of copper. In addition, Barrick reported a higher realized price for gold than in the first quarter. Overall, Barrick expects to hit its mid-point of yearly copper guidance.

Higher energy costs and a lower copper price impacted Barrick’s cost structure. Still, the company expects to meet its 2022 production guidance. All-in sustaining costs are projected to be 3% to 5% higher.

Barrick’s balance sheet is deleveraging. In Q2, the company repatriated surplus cash from Kibali Mines in the Democratic Republic of the Congo. At the end of the quarter, the company had $636 million in cash and over $600 million in net cash.

Agnico Eagle Mines reported in-line earnings and revenue for the second quarter of 2022

Agnico Eagle Mines Limited (AEM) reported second quarter 2022 results that met and exceeded investor expectations. The company posted revenues of $1,581.1 million and net income of $275.8 million, which exceeded Zacks Consensus Estimate of $1,556 million and $0.75 per share, respectively. These figures marked a 19% increase over the prior-year quarter. In addition, the company announced a quarterly dividend of $0.40 per share.

For the first half of 2022, Agnico Eagle reported total cash costs of $712 per GEO(2) and AISC of $988 per GEO(2), which were both increases over the previous quarter. The increase in all-in sustaining costs was primarily due to higher sales volumes and realization of higher metal prices.

AEM continued to see strong production. Total payable gold production in the second quarter was 858,170 ounces, which was up 63% from the same period last year. The company’s payable gold production is expected to range between 3.2 and 3.4 million ounces for the full year.

ETF outflows jumped to 227 tonnes during the third quarter

The third quarter of 2017 was a roller coaster ride for the gold and silver markets. As expected, the dollar took a beating, and prices were driven up by a combination of central bank and retail demand. Despite this, demand still grew by about 28% year-on-year, with some markets like Australia, China and the UK outperforming their respective peers. However, investment demand in South Korea continued its downward trend and overall net investment in the country was a paltry 3t in Q3.

Overall, the gold market was surprisingly resilient, despite the usual dollar depreciation. In spite of this, the largest single contributor to overall outflows was the US. This was a reflection of the hawkish Fed, which has sparked a spate of outright buying, and the specter of stagflation. Nevertheless, gold ETF holdings rose to 3,548t by the end of September.

Despite this, there was more than a little bit of confusion in the markets. Outflows were skewed toward larger, more liquid funds, and sentiment was a bit more negative.

Morgan Stanley economists believe prices will “peak then retreat”

Inflation will peak then retreat in 2022, according to a new Morgan Stanley note. As supply and demand dynamics settle, price increases will be more gradual. And the Fed and the ECB will not take drastic measures to raise rates, the report says.

The report predicts that inflation in the major markets will peak in 2022 and then retreat by two percentage points over the next two years. And while the economy may slow down, emerging markets will continue to grow, especially Asia. While the cyclical tech sector could lag, health care stocks, the firm said, should see “huge upside” in the year ahead.

The firm also expects the ECB to hold off until late 2023 and the Fed to wait until September 2022 before raising interest rates. These forecasts may be disappointing for investors who have been anticipating two rate hikes in the near future. But, the firm’s economists argue, the economic conditions will be better than they have been in recent years.

Demand for gold from exchange traded funds

Gold exchange traded funds continue to be popular with investors. While they can be volatile, they have historically held value well over the long term. However, the market has been moving in the wrong direction in the past year. Consequently, it is important to monitor your holdings regularly to make sure that they are not overvalued.

Gold’s price has declined modestly following the Federal Reserve’s recent interest rate hike. The Fed has indicated it expects to raise rates another three quarters of a percentage point in December.

As the inflation war continues, the Federal Reserve has signaled it is prepared to raise interest rates even further. This has pushed the US dollar to record highs against a basket of major currencies.

Several central banks have started diversifying into gold. In addition to physical gold coins and bars, ETFs have become increasingly popular. These are funds that invest in companies that produce gold. Purchasing these funds helps to drive total gold demand.

Russia’s threat of an invasion of Ukraine

Russia’s threat of an invasion of Ukraine has thrown global financial markets into turmoil. Although the apocalyptic scenario is far off, it has triggered a new wave of interest in safe haven assets like gold.

Gold’s price has climbed over the past few months, despite a more hawkish US Federal Reserve. However, analysts aren’t yet convinced the price will continue to soar.

A key question is how Russia will respond to an expected Western military strike. The Kremlin has already warned the West of its plans to use nuclear weapons in response to a possible attack. It is also unclear whether Western governments will do what they can to deter Russian retaliation.

Some Western policymakers are even wondering if the United States is doing too much to support Ukraine’s war effort. In any event, Moscow has clearly made the nuclear threat a centerpiece of its public relations campaign.

Besides the fact that a nuclear strike would draw the attention of the world’s largest military alliance, there is no evidence that the Russian government actually has a plan to carry out a nuclear strike.

Rising inflation

When inflation reaches double digits, gold prices tend to jump. However, the gold price has slowed down in recent years. This is not to say that gold hasn’t performed well. But it’s important to remember that gold is not a perfect indicator of inflation.

The Federal Reserve has raised interest rates several times this year. In response, some investors are worried that this will lead to a recession.

Gold is considered a safe investment during market volatility. Some investors also believe that gold is a hedge against inflation. As an example, a US inflation report shows that consumer prices rose 8.5% in August compared to a year ago.

The Fed has also indicated that they will hike rates again. A 75-basis point increase is scheduled for next week.

As inflation continues to rise, gold and silver will likely be pressured. However, the Fed may be able to meet its inflation goal without tanking the economy.

US recession

Gold prices are currently down about 40% from a record high of US$2,087 per ounce hit in March. However, the price has fallen less than the stock market. The Federal Reserve recently signaled significant interest rate hikes.

Inflation is a concern for many policymakers. It’s also a major concern for everyday Americans. One study found that 18 percent of respondents named inflation as the biggest problem they face.

Despite the fact that inflation is above the 1970s peak, it’s still lower than it was during the great depression. However, the Fed has fought runaway inflation by raising rates. This has some investors worried about the possibility of a recession.

Gold is a safe haven. Central bankers have a lot of gold in their reserves. They’re diversifying into other assets. But with the rising price of government bonds, the opportunity cost of holding gold is higher.

Another factor underlying the price of gold is investment demand. While the Fed is raising rates, the stock market has been down. Investing in gold could help keep a portfolio in line with inflation.

Gold prices have failed to spur physical demand in Asia

Gold prices have been falling for the past two weeks, but that hasn’t spurred physical demand in Asia. The tumbling price has pushed investors to the sidelines, while some consumers have taken advantage of the cheaper prices to buy gold. But in some cases, these purchases are still more expensive than the alternatives.

While the prices are declining, the premiums are soaring. This is particularly true in Thailand, where the local currency is weak and gold trades at a premium. It has been in the double digits for the past few months.

Silver is also on the rise. According to Silver Bullion Pte Ltd., founder in Singapore, sales of silver rose 235% in the first week after Russia invaded Ukraine. However, the real winner has been silver’s premium. In recent weeks, the price differential has soared to $1.

One of the reasons for this premium is the fact that many Asian countries have not been able to get bullion into the market. For this reason, some of the bigger purchases have been in the East.

Gold prices could surge to $4,000 per ounce in 2023

Gold prices could reach $4,000 an ounce by 2023, according to Juerg Kiener, managing director of Swiss Asia Capital. This price would be more than five times the current value.

In recent years, central banks have been increasing gold reserves. They also are diversifying their foreign exchange holdings to lessen their dependence on the U.S. dollar. However, the continued aggressive rate hikes from major central banks have led to sizable outflows in the second half of the year.

Despite a 3% increase in the price of gold, demand in December was muted. The biggest buyer in the third quarter was Turkey.

Earlier this month, the People’s Bank of China announced the first official gold purchases in over a year. Analysts believe this is a sign of increased demand from the Chinese market.

Another big seller this month was the Central Bank of Uzbekistan. As inflation in the U.S. hit 8.3 per cent, the Fed raised rates by 50 basis points. It is still possible for more rate hikes to come. If the Fed continues to raise interest rates, markets could become more volatile.

China’s central bank added $1.8 billion in gold reserves

In November, China’s central bank added 32 tons of gold to its official reserves. This was the first official increase in over three years. The total reserve now sits at about 1,980 tonnes.

The People’s Bank of China added $1.8 billion to its gold reserves in the past few months. Its latest addition brings the total to around $112 billion.

While China’s gold purchase is the largest in years, it is not the only country increasing its holdings. Central banks have been buying up gold at the fastest rate in decades.

The World Gold Council estimated that central banks bought 399 tonnes of the yellow metal in the third quarter of 2022. However, there has been little data on the actual number of tonnes, since some central banks are not reporting their holdings.

Similarly, it is not clear how much gold Russia has. While the central bank has said it would like to have 25 percent of its reserves in gold, monthly reporting has been discontinued.

Gold prices have failed to launch a comeback in the near term

Gold prices have retraced nearly five years of gains in the last three months. Although gold has failed to launch a comeback, it is still the best asset to hold this year. However, it has fallen by around 20% from its March peak.

In the past six weeks, global growth worries have increased. Mixed economic data has also emerged from several major economies. And a war in Ukraine has helped fuel energy prices.

Gold has been seen as a safe haven in turbulent times. However, in the 1980s, it failed to protect investors from inflation. Now, the dollar is strong, and foreign investors are being charged more to invest in gold.

It may be possible for gold to resume its upward trajectory, but the picture on inflation will need to change. Otherwise, gold’s price will likely drop again.

The Fed has been aggressively hiking rates to bring down inflation. But the growth outlook for the US economy is uncertain. The Fed’s tightening cycle may have run its course.