Why This Week Is Pivotal for Gold Investors

gold nuggets, gold price
Written by Mike Hammer

This week & next week could be important ones for gold investors & traders.  Many gold miners are reporting earnings this week, including NEM (November 5) and GOLD (Nov 6).  Next week FNV (Nov 11) and WPM (Nov 14) are on the list.

What your friendly Gold Enthusiast will be paying attention to are these two numbers. First is All-In Sustaining Costs (ASIC), which gives an indication of a company’s operating costs and the sustainability of their production. For ASIC lower is better.

Second, is profit compared to the previous quarter. Gold selling prices were up significantly in the 3rd quarter compared to the 2nd quarter, so a well-performing company should show an increase in profit over the prior quarter, taking out new activity and expenses for new project development.

If a company has lower profits doing the same thing while selling price is rising, it usually indicates very significant management issues for the company.  Or, possibly, their resource is not as productive as expected, which is another red flag.

Keep an eye out for the overall trend, and watch very specifically the earnings reports for any precious metals company you own.  If it doesn’t look like “clear sailing ahead” it probably isn’t – and you should strongly consider selling any companies with weak reports if they haven’t dropped in price already. In mining companies, it takes a long time to turn around weak companies, and you can usually put your money to work more productively in other things rather than wait out recovery stories.


The Gold Enthusiast

DISCLAIMER: The author owns 100 shares of FNV and has no plans to trade those shares in the next 72 hours. The author has no positions in any other mentioned security. The author is long the gold sector via positions in NUGT, JNUG, a few junior miners, and covered calls on part of the NUGT position. The author may initiate new covered call positions in NUGT and/or JNUG in the next 72 hours if market conditions warrant.

About the author

Mike Hammer

Mike Hammer has had a wide-ranging career, with trading and investing as continuing themes. Mike graduated with a business degree and spent years as a financial advisor, before moving to New York and to pursue a career in IT and education. For more than a decade Mike has been working with the Adam Mesh Trading Group as a stock market and commodities mentor. He’s trained over 200 individuals, spoken at several national conventions, and is a frequent contributor to educational webinars.

Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keeps him in touch with "the student mindset".

Mike focuses on the precious metals markets, the energy industry, and the financial sector. His motto is "Plan your trade, then trade your plan!"

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