Gold for immediate delivery closed up during week three of the new year on the London Bullion Market.
On Inauguration Day on Jan. 20, gold closed at $1,200.55 per troy ounce, up $4.50 from the previous trading day, responding to a weaker dollar against other currencies.
The U.S. Dollar Index closed at $100.81 on Jan. 20, down 34 cents since the prior close.
Over the first four trading days of week three, when gold spiked $1,217.50 per troy ounce on Jan. 17, the highest since the beginning of the new year, the precious metal was down 60 cents from $1,202.75 on Jan. 16, to $1,203.35 on Jan. 19 on the LBM.
Source: Kitco.com
On the London Bullion Market, gold gained 4.3% up $49.56 per troy ounce year to date, from $1,151.000 on Jan. 3, to $1,200.550 on Jan. 20. The price ranged between a low of $1,151.000 and a high of $1,216.050. The cumulative average price over the first three weeks of the new year is $1,188.58 per troy ounce.
Source: kitco.com
Gold also closed up during week three on the Comex.
Gold Futures - Feb. 17 (GCG7) closed at $1,209.50 per troy ounce, up $8.00 from the previous close.
This was the 11th pick on the Comex since the beginning of the new year and the 16th jump over the last trading month.
Over the last trading month, the price of gold futures ranged between a high of $1,214.70 per ounce and a low of $1,128.30 per ounce. The average price and average change were $1,172.18 per ounce and 6.47% over the observed period.
Gold futures was less volatile since the beginning of the year compared to the last trading month: the average change in the price of the contracts through which gold is traded was 3.48% and the average price was $1,091.12 per ounce.
Let’s have a look at the gold stock industry.
Year to date, Market Vectors Gold Miners ETF (GDX) gained 11% and outperformed the biggest gold producers of the industry. The index outperformed Barrick Gold Corp. (NYSE:ABX) by 4%, Goldcorp Inc. (NYSE:GG) by 9% and Newmont Mining Corp. (NYSE:NEM) by 1%. The SPDR Gold Trust (ETF)(GLD) gained 5% year to date.
Over the week, Goldcorp performed the best among the biggest gold producers. The company gained 5.20%, driven by improved operating results as shown by the company’s last quarter and full-year 2016 preliminary operating results.
It seems that the market has also favourably welcomed the decision of Goldcorp to sell the Los Filos mine in Mexico and the Cerro Blanco gold-silver project in Guatemala.
Goldcorp is trading around $15.38 per share at 0.98 times the Ebitda. The EV/Ebitda ratio is 11.53.
Barrick, the world’s largest gold producer, is currently trading around $17.11 per share at 2.65 times the book value and 6.40 times the Ebitda. The enterprise value is $25.83 billion.
Newmont is trading around $35.04 per share with a price-book ratio of 1.68 and an EV/Ebitda ratio of 6.75.
Among the mid-tier gold producers, Iamgold (IAG, Financial) performed the best year to date. The company gained 15.58% versus Harmony Gold (HMY, Financial) up 12.22%, Eldorado Gold Corp. (EGO, Financial) up 7.45%, Yamana Gold (AUY, Financial) up 14.23% and Kinross Gold Corp. (KGC, Financial) up 15.42%.
Disclosure: I have no positions in any security mentioned in this article.
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