Five charts to start your day

The great disconnect between gold and the mining companies that dig it up

There is a widening gap between the soaring prices of gold and underperforming gold mining stocks from mid-2022 to the present. Despite gold reaching record highs, surpassing $2,100 per ounce, due to factors like anticipated lower US interest rates and robust demand from Chinese households, mining stocks have not mirrored this success.

Newmont Mining, a leading gold miner, experienced a significant 25 percent drop in its stock price over the year, following its costly acquisition of Newcrest. By contrast, Kinross Gold saw its stock price surge by 42 percent, benefiting from strategic share buybacks influenced by activist investor Elliott Management.

The first chart today underscores the disconnect between the value of gold itself and the financial health of the companies extracting it, highlighting the importance of corporate fundamental and company specific risks within the gold mining sector.

Source: Financial Times

Coming up:

• Interest payments made by US households

• Economist now expect three ECB rate cuts this year

• Global ocean temperatures are surging to record high…again

• A history of the effective funds rate

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