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Highlights
- Federal Reserve Chair Jerome Powell warned on Friday (26 August) that restrictive monetary policy would be needed "for some time" until inflation is under control.
- While gold is a safe investment during economic uncertainty, rising interest rates increase the opportunity cost of owning non-yielding bullion.
Gold price fell over 1% after Federal Reserve Chair Jerome Powell warned in a speech at Jackson Hole on Friday (August 26) that restrictive monetary policy will be needed "for some time" until inflation is under control.
Powell stated that this might result in slower growth, a weaker labour market, and "some pain" for consumers and businesses, but he did not speculate on what the Fed could do at its September policy meeting.
There is no denying the fact that gold is considered a safe investment during times of economic uncertainty, rising interest rates increased the opportunity cost of owning non-yielding bullion.
Today (29 August) at 5.17 PM AEST, gold prices were spotted at US$1721.85/t.oz, down 0.87% on a daily basis and 0.76% on a weekly basis.
Meanwhile, the overall ASX market closed in red today, down 1.95% to 6,965.50 points. The ASX 200 Materials index was also 2.40% down at 16,434.60 points.
On a sectoral front, all 11 sectors were lower today and materials was the second worst performing sector after IT.
In this article, we at Kalkine Media® will discuss a few gold stocks and the impact of Powell's speech on their performance.
Northern Star Resources
Australia-based gold mining company Northern Star Resources Ltd (ASX:NST) is involved in the exploration, development, mining, and processing of gold deposits and selling refined gold.
Northern Star shared its financial results for 2022 today.
Here are the highlights of Norther Star financial results:
Image Source: © 2022 Kalkine Media ®
Data Source- Company announcement dated 29 August 2022
Following the end of the fiscal year, Northern Star announced an on-market share buy-back of up to AU$300 million as part of its proactive capital management plan.
Image Source: © 2022 Kalkine Media ®
Data Source- Company announcement dated 29 August 2022
Road ahead
Northern Star's financial condition is good, with AU$628 million in cash and bullion as of 30 June 2022. The company's FY23 growth program has been fully funded and conforms with its capital management approach of allocating resources to initiatives that provide superior returns.
As stated on 20 July, Northern Star is well positioned to deliver 1,560koz-1,680koz gold in FY23 at an AISC of AU$1,630-1,690/oz. As a result of the Thunderbox mill expansion and Pogo stoppage timetable, gold sold is likely to be weighted towards the second half.
Meanwhile, shares of Northern Star closed at AU$7.46 each, down 1.58% on ASX today.
Evolution Mining Limited
Evolution Mining Limited (ASX:EVN), a gold ore mining company, operates gold-related mining projects, including Mungari in Western Australia, Cowal in New South Wales, Mt Rawdon and Ernest Henry in Queensland, and Red Lake in Ontario, Canada.
In its FY22 full-year report on 18 August 2022, Evolution reported a statutory net profit of AU$323.3 million for the year ended 30 June 2022. The company announced to pay a fully franked dividend of 3.0 cents per share.
Image Source: © 2022 Kalkine Media ®
Data Source- Company announcement dated 18 August 2022
Meanwhile, shares of Evolution Mining ended the day in red, closing at AU$2.37 each, down 5.20% on ASX today.
Newcrest Mining Limited
Newcrest Mining (ASX:NCM) and its subsidiaries are involved in the exploration, development, operation, and sale of gold and gold/copper concentrate.
The mining company shared its financial report for 2022 on 19 August 2022. Newcrest's statutory and underlying profits for the current period were US$872 million.
The company has announced to pay a fully franked final dividend of US 20 cents per share.
Newcrest also said that reduced production volumes at Cadia resulted in a lower underlying profit of US$292 million compared to the prior period.
Notably, production volumes were also reduced at Lihir due to extensive maintenance work, restricted autoclave availability, and unscheduled downtime.
Newcrest also updated its group Mineral Resource and Ore Reserve for the six months ending 30 June 2022.
As of 30 June 2022, the Group Ore Reserves were estimated to contain about 61 million ounces of gold, 11 million tonnes of copper, 29 million ounces of silver, and 0.099 million tonnes of molybdenum.
Meanwhile, shares of Newcrest last exchanged hands at AU$17.39 each, down 4.66% on ASX today.
