Monday, November 8, 2010

Barrick (NYSE:ABX), Goldcorp (NYSE:GG), Newmont (NYSE:NEM) Push Up As Gold Breaks $1,400

Major gold miners Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Newmont Mining (NYSE:NEM) are all pushing up today, led by Barrick, which soared over 3 percent as gold prices soared past $1,400 an ounce.

The gold news going forward will largely be the effects of quantitative easing on the price of gold, as well as the U.S. dollar, which usually move inversely to one another.

Ben Bernanke instituted another round of inflating by announcing he will inject another $600 billion into the economy over the next 8 months, and if that doesn't work, he's poised to go even further if he has to, as he doesn't know how to do anything else.

Gold investors will benefit from this, and those gold miners who have positioned themselves as regular companies should outperform the others. In other words, those that are offering dividends and helping investors to better understand their businesses should do well.

The other major factor is gold miners who have lowered their costs of doing business through managing operations, and having solid ancillary metal revenue which offset the cost of mining for gold per ounce.

Barrick was trading at $50.74, gaining $1.53, or 3.11 percent as of 2:19 PM EST. Goldcorp rose to $47.47, up $1.24, or 2.68 percent. Newmont was at $62.51, increasing $0.89, or 1.44 percent.

With these three major gold miners considered safer bets, they will benefit strongly in the sector, although a number of smaller miners are ready to soar, especially those that have been out of favor from past guidance and haven't moved up with gold prices.

No comments: