Source: company website
Gold miners have been on a tear lately, as the price of gold has jumped in response to cutting interest rates to almost zero, the huge government stimulus recently enacted, and the Federal Reserve saying it'll do what it takes to defend the economy, businesses, and the American people.
One of the top performers in the gold sector has been Gold Fields (NYSE:GFI), even though it has also been one of the most volatile. I believe that's occurring because both shorts and longs are targeting the stock, which has brought wide swings in its share price on both sides of the play.
In this article we'll look at what the future for the company looks like over the next year or so, and why I prefer to trade it rather than buy and hold.
Production losses
On April 23, Gold Fields reported its production losses at its South Deep mine in South Africa were muted, with estimates that the company will only lose about 22,000 ounces in production at the site because of the national lockdown. Outside of that, there hasn't been much impact on production from COVID-19.
For the quarter ended March 31, the company produced 537,000 ounces, down by 5,000 ounces from the 542,000 ounces produced in the same reporting period of 2019. Gold Fields also noted that all regions were tracking its annual guidance. In response to the update, its share price soared to a 52-week high of $8.48, eventually pulling back to close at $7.98 on Thursday, April 23. While the outlook has improved, the company stated that things remain fluid, and it could change because of further lockdowns going forward.
"The impact of the pandemic has been relatively muted on our operations, with production only slightly affected. However, the situation is fluid and there is
