The Gold Price has recently hit one of the lowest levels in more than a year. A day after the European Commission document revealed that Cyprus is required to sell around 400 million Euros worth of gold reserves under its rescue plan the Gold prices tanked as a result of the heavy fund liquidation.
Prices were also brought down by a sense of insecurity over the U.S. Federal Reserve’s motivation plan and by the heavy outflows of exchange-traded funds.
As a result of the news from Cyprus Goldman Sachs downgraded the gold price estimate for 2013 and further pushed gold miners to suffer steep falls in their revenues and on their share prices.
Newmont Mining Corp (NYSE:NEM) closed 2.60% lower from its previous close before the announcement that Cyprus had to sell a large share of its gold reserves. NEM closed at $38.99 which is only 2.42% higher than the 52 week low and 31.43% lower than the 52% week high. Bruce R. Brook, who serves on the board of Newmont Mining was quoted as saying “I don’t think anyone saw this crisis in Cyprus coming about 4 weeks ago. The crisis definitely had an impact on the price of gold and every player in the gold mining industry. However, I am staying positive and am confident in the future of Newmont Mining Corp.”
Yamana Gold Inc (NYSE:AUY) finished last trading day -4.05% and moved lower to $14.22. Despite this decrease the stock was still up 13.90% from the 52 week low and -30.38% below the 52 week high. It has shown down trend of -2.60% in the same period with a monthly performance of 0.57% and 3-month performance down -13.71%. Despite the recent downturn in the stock price, Peter Marrone, CEO and founder of Yamana Gold Inc. was quoted saying “I’m not very concerned with the recent events. We are staying focused on meeting our goals and delivering results for our shareholders. We have some great news coming up and I’m sure those will move us that much closer to our goals.”
Goldcorp Inc. (USA) (NYSE:GG) ended the trading at $31.56 as it moved -2.62% lower than the previous day. Despite the recent decreases the stock is still up 3.07% from the 52 week low, but -32.95% below the 52 week high. The 3 months performance of this stock experienced a decline of -12.31% while during the last 6 months it went down -31.24%. However, when looking at the last 12 months we can see an increase of the stock price of 21.49%. Charles A. Jeannes, CEO of Goldcorp Inc, was also quoted saying “Despite recent events gold will remain a safe haven. The near future of gold is also positive as supply is constrained and demand for gold continues to increase. Whether the future positive trend is because of the safe haven investment, or because of inflation concerns the trend is definitely positive.”
When Peter Marrone, CEO of Yamana Gold Inc, was asked in a separate interview what his thought of the recent fad of “grade is king” or quality over quantity is and how he will manage the future expansion for Yamana Gold to ensure this standard is maintained while ensuring cash flow and profitability is met Peter Marrone explained:
Fortunately we don’t have to change anything because we have always focused on extracting the highest quality products. None of the products we put out on the market are below par. When someone looks at our mines worldwide our mined grades remain high although we are expanding at a rapid pace and production increased considerably over the recent year.