Barrick Gold Corporation (USA) (NYSE:ABX) shares trading down
Shares of Barrick Gold Corporation (USA) (NYSE:ABX) plunged sharply by 6.33% to close at $13.76 in Friday’s trading session. The stock opened at $14.25 and made an intraday high of $14.30 before falling. Over 29.40 million shares were traded in Friday’s trading session which was very high compared to average volume of 19.38 million shares in last 90 trading sessions. Barrick Gold Corporation (USA) (NYSE:ABX) engage in the manufacture and trade of gold, and some other related businesses like mine development and explorations. The company also manufactures copper, mainly from the mines of Lumwana and Zaldivar. It also holds interests like a project of nickel development situated in Africa.
Gold has demonstrated a fall by 23.2% in the last year. This has occurred mostly because of the presumption that the US Federal Reserve will reduce its stimulus operations. This would ultimately provide strength to the US dollar. Gold trades In US dollar as the base currency. It would then mean that billions of money invested in metals would be drained.
Consequently, the gold mining stocks have been amongst the biggest losers including Barrick Gold Corporation (USA) (NYSE:ABX) which together with and AngloGold Ashanti Limited run biggest gold mines of South Africa. The stock price of Barrick Gold Corporation (USA) (NYSE:ABX) has declined over 47.4% in the last year. This directly relates the costs of gold output turning high to $896/oz. Ultimately, there remains little space for the companies to be able to earn profits.
The situation has been worsened because of the threat by the unions of miners in South Africa for labor strikes as well as closure of mines till the time they receive improved base pay and better conditions to work in. It is difficult to be accepted by Barrick Gold Corporation (USA) (NYSE:ABX) under existing contracts with labor, the miners receive payment at rates which creates unprofitability with gold’s low price.