Gold miners soon will release quarterly earnings, but J.P. Morgan says investors should focus on...

Gold miners soon will release quarterly earnings, but J.P. Morgan says investors should focus on what the companies are doing to cut costs. Barrick Gold (ABX) would be profitable even if gold falls to $1,300/oz., the firm says, but remains vulnerable due to cash needed to operate the Pascua-Lama mine and massive debt on its balance sheet. Goldcorp (GG) has a strong balance sheet and $2B in an undrawn revolver.

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Comments (7)
  • deercreekvols
    , contributor
    Comments (9849) | Send Message
    First we get "advice" from Goldman Sachs, now JPM chimes in.


    Don't these two "banks" have better things to do?


    There is little doubt that both "banks" bought massive amounts of gold on the drop this week.


    What triggered that drop?
    19 Apr 2013, 05:06 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1625) | Send Message
    When an analyst says that you are better off ignoring the earnings, that means that earnings are guaranteed to be atrocious. I would suggest that you are also better off selling any gold miners you may be holding, because then it would be much easier to ignore their earnings.
    19 Apr 2013, 05:28 PM Reply Like
  • evan.prospect
    , contributor
    Comments (704) | Send Message
    I think what the analyst is saying is that the results from Q1 are backward looking (more than normal due to higher gold prices in Q1) so investors should focus on what cost-cutting miners are doing so that their Q2 earnings don't fall off a cliff if gold doesn't rally anytime soon. In sum, the miners sold off not because of Q1, but because investors are much more worried about Q2 and Q3 earnings going forward. In my humble opinion, if one didn't sell the miners, it's probably best to hold onto them since the physical price is likely oversold.
    19 Apr 2013, 06:25 PM Reply Like
  • alan460
    , contributor
    Comments (58) | Send Message
    Evan, I think you're right to hold on to the miners - I certainly am, but I disagree with your statement that the "physical price is likely oversold”, it's actually the paper price that is oversold. The physical demand is very strong. It's just that the price is dictated by the COMEX and all of the short selling and margin covering that goes on there. It has nothing to do with physical demand which is strong - not only from central banks, but also from retail investors who, according to my bank manager here in Canada are placing orders for gold coins in unprecedented numbers.
    20 Apr 2013, 09:31 AM Reply Like
    , contributor
    Comments (10814) | Send Message
    Let's see.....ABX lost money last year.
    19 Apr 2013, 06:44 PM Reply Like
  • alan460
    , contributor
    Comments (58) | Send Message
    Does anyone really believe what JPM or Goldman says – other than their “Muppets”?
    20 Apr 2013, 09:08 AM Reply Like
  • eagle1003
    , contributor
    Comments (1944) | Send Message
    I keep reading about how all the coin dealers are sold out. Is the retail investor the new 'smart money'?
    20 Apr 2013, 10:35 AM Reply Like
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