Kinross Gold Corporation (KGC)‘s prices fall as gold prices fall and U.S. dollar becoming strong. Speculation of rate hike by FED this summer makes U.S. dollar strong and gold prices to plunge. When dollar rises then it is followed by number of events like falling in other currency compared to dollar and rise in gold prices.
When compare to yield to interest rate and bank rate deposits, gold suffer to keep ground as there is no possibility of earnings more than deposits in the near term. Gold prices came down to $1,234.40 per ounce and it’s down by 1.375 for June delivery.
Kinross Gold is Toronto based mining company and other work area includes exploring and acquiring gold bearing properties across the globe, also includes extraction and processing of gold which contains ore and reclamation. Experts said that as per ANZ Research, Hike in interest like is very much likely in June making it Gold prices to go down further from current stage. Last two months were good for Yellow metal as it shows signs of longest gains though.
Adam Koos who is president of Libertas Wealth Management Group recently said, “We have finally seen gold start to pull back to more reasonable levels,” also said by him that, “The recent run up could still see some profit taking ahead, which is likely why we have seen breather out of metal.”
Kinross Gold has been solid performer as far as its stock is concerned, company’s growth and revenue were intact till now. But cash flow from operating activities was counterproductive to its stock performance and revenue growth. The return on equity share of Kinross Gold was not favorable recently as per market experts.
Analysts have given, “Hold” rating to its stock and with ‘C’ grade on Kinross Gold. Factors which affect growth are mixed as some sectors shows growth and some revenue loss, however; it is difficult to compare company’s stock with the same size of other companies.
Kinross Gold’s shares were down by 6.13% to $4.59 in morning trading sessions. Almost all the gold stocks were down due to plunges in gold prices. The Street Ratings has concluded its research on Kinross Gold stock based on last 12 months data and not related to any single day activities.
Chief market strategist, Naeem Aslam said that, “Most of the bad news is factored in to dollar and it appears they cannot push greenback any further. This is impacting the price of Gold.’’
Market research experts feel that gold demand is not going to be very high during coming months and Kinross Gold won’t make much contribution to its EBITA. Recent news about Kinross Gold that unionized employees at company’s Taslast Mine have gone on strike has also impacted company’s stock. However, company is not expecting any adverse effect of strike to its Taslast Mine first phase expansion and is open to negotiations with labor forces to resolve the issues.