Gold has gone back up above US$1,300/oz after dipping down to US$1,277 briefly last week. This is partly due to a weaker US dollar and political tensions between Ukraine and Russia are still adding anxiety to gold demand. The spot price now stands at about US$1,316/oz.
In March, prices climbed quickly to about US$1,390/oz, then came down just as rapidly. There are still lingering suspicions that the reported gold consumption levels of China are underweight and not reflecting actual levels.
It is also said that China may be building up gold reserves to reduce its exposure to the US$. This could be for a hedge against inflation and to become more independent from US financial influence. China is now the largest importer of gold, followed by India.
Newcrest Mining Limited (ASX: NCM) has followed gold’s rise, up from about $9.50 in late March to $10.89 currently. It has a PE of 20.2 and its dividend yield is 1.1%.
Northern Star Resources Ltd (ASX: NST) is the only gold mining company in the S&P ASX 200 Index (ASX: ^XJO) that is actually up over the past 12 months in share price. Since early December it has climbed from about $0.64c to $1.15 currently, close to double in four months.
It made its first big revenues in 2011 and since then net profit has gone from $16.3 million to $28.3 million. It is producing over 350,000 oz per year and the next target is 500,000 oz annually. It is targeting an all-in sustaining cash cost around A$1,050/oz for the group.
The PE is 15.2 and the dividend yield is 3.0%.
Beadell Resources Ltd (ASX: BDR) released its FY2013 annual results, making a profit for the first time since listing in 2007. The $113.5 million net profit was on $253 million revenue. It was its Brazilian mine’s maiden production.
The company is expecting production for calendar year 2014 to be 200,000-220,000 oz. Cash costs should be slightly under US$535-$585 per oz, including royalty and by-product credits.
The share price is at $0.62c and the PE is 4.2.
After rebounding twice from lows of around US$1,200/oz within the past year, the gold price may start recovering from its downward trend in the near future. That’s not to say it will rise suddenly, but range sideways for a while.