Gold Falls As Equities Rise

Gold prices eased down today in response to an upbeat demand for equities. Though losses for precious metals are still limited as the market remains uncertain about the pace of interest rate hikes to be implemented by the Federal Reserve.

Story continues below

Click Here For More Market Exclusive Updates & Analysis

Loses Capped

Gold Futures for April delivery fell 0.64% to $1,203.60 as Asian markets finished broadly higher and European markets followed suit, though mildly. Meanwhile, upside in oil prices has also uplifted sentiment around equities, limiting the demand for the yellow metal, which is often seen as a safe haven asset at times of global economic volatility.

SocGen analyst Robin Bhar commented that the upward movement in equities over the last three days has instilled a sense of calmness in the markets, which is a reflection that riskier assets are gaining ground while gold is less of a priority.

Still, gold has support as far as the ambiguity over interest rate direction is concerned. Bhar does not see any substantial drop in gold prices ahead as Federal Reserve policymakers remained divided over the prospect of implementing further rate hikes.

Earnings and performance

Meanwhile, one of the significant gold miners, Barrick Gold Corporation (NYSE:ABX) released its report for the quarter, where it booked huge losses as expected. The company asserted that it will do everything possible to trim down its debt by at least $2 billion this year. Apart from this, Gold Fields Limited (NYSE:GFI) has hinted that it will expand its footprint and is exploring assets in Australia. The move is largely aimed at coping with the volatility in the commodities market, Bloomberg reported. The stock was up 2.42% to $4.24 yesterday.

Sharing the plight of gold miners was Newmont Mining Corp (NYSE:NEM), which failed to meet the Street’s earnings expectations, but was still up, indicating the possibility that the bear market in gold equities may have finally ended. The company’s earnings per share in the fourth quarter came in at $0.04 per share while revenues stood at $1.816 billion. The company’s stock ended 1.14% up at $24.84 yesterday.

New Gold Inc. (NYSEMKT:NGD) managed to report Q4 EPS in line at $0.01 while it barely missed on revenues, which came in at $199 million versus the forecast of $200.5 million.

An ad to help with our costs