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October Was a Good Month for Gold Miners

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Miners gained

Since the FOMC (Federal Reserve Open Market Committee) policy-setting meeting kept gold bugs on their toes, October seems to be positive for gold miners. The gold futures rose 3.10% on a 30-day trailing basis. Silver futures rose 9.50%. The gains in the bullions are reflected in the prices of the mining ETFs. Mining ETFs like the Sprott Gold Miners ETF (SGDM) and the Proshares Ultra Trust ETF (AGQ) rose 21.70% and 18.30%, respectively, on a 30-day trailing basis. The gain in the prices for these miners is likely due to the rising bullion prices in the past month.

Also, mining companies like AngloGold Ashanti (AU), Newmont Mining (NEM), Silver Wheaton (SLW), and Barrick Gold (ABX) saw a rise in their share price in the past 30 days.

The above chart provides a comparative price performance for gold futures with AngloGold Ashanti’s share price since 2012.

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Miners’ news

Newmont’s rise in the price contributed to the positive 3Q15 financial results. The total gold production was 1.34 million ounces during the third quarter ending in September. The figures rose by 16% from the same quarter last year. The YTD (year-to-date) gold production rose 6% to 3.78 million ounces. Newmont has acquired a few new mines in the current year. As a result, production increased. The production was also boosted in the existing mines of Batu Hijau, Tanami, and Boddington. The company has also been selling a few assets to generate cash inflow.

Barrick Gold is the world’s largest gold producer. It reported its 3Q15 earnings. The earnings beat analysts’ estimates. The lower costs and higher production helped the company to mitigate the impact of the weakness in metals’ prices. The company pledged to reduce its debt by $3 billion. This would happen by selling assets and cutting costs after gold prices fell and its shares fell.

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