In the realm of gold mining, Barrick Gold Corporation (NYSE:GOLD) stands as a prominent figure, its fortunes often seen as a barometer for the industry’s health. However, recent times have witnessed a puzzling narrative unfold. While the price of gold surged from $1,800 to nearly $2,400 between mid-2020 and now, Barrick Gold’s stock journeyed in the opposite direction, slipping from above $30 to $17 levels during the same period.
Such divergence between gold’s ascent and Barrick Gold’s descent raises eyebrows and questions alike. Recently, Barrick Gold shared its earnings report for the first quarter of 2024. While the numbers themselves painted a positive picture, with Barrick Gold reporting a Non-GAAP EPS of $0.19, surpassing expectations by $0.04, and revenue reaching $2.75 billion, a 4.2% increase year-over-year, the market’s response remained lackluster.
Concerns regarding geopolitical tensions, particularly in regions where Barrick operates its mining complexes, cast shadows over the company’s future prospects. Speculations surrounding Mali’s potential seizure of Barrick Gold’s assets, including the prized Loulo-Gounkoto mining complex, have stirred anxiety among investors. Similarly, production underperformance and operational setbacks have further dampened investor sentiment, raising questions about Barrick Gold’s ability to deliver consistent returns amidst a volatile market.
Furthermore, as other gold miners exhibit more robust performances, the allure of Barrick Gold has begun to wane. Competitors in the industry are outshining Barrick, raising doubts about its competitive edge and long-term sustainability.
In this climate of uncertainty and skepticism, investors are left pondering whether Barrick Gold is truly the right choice for betting on gold price appreciation. To answer that, let’s delve into the charts to assess Barrick Gold Corporation’s potential as a gold investment in the current market landscape.
Gold glitters, but Barrick falters
We cannot discuss the price movement of Barrick Gold without first discussing how gold prices have performed during the same period. Since March 2020, when gold prices fell below $1,500 and bounced back, they traded in a $1,600-$2,100 range for the past four years. They broke out from this range by climbing above the $2,100 resistance in March this year and making a high near $2,450 in April.
Gold futures chart by TradingView
If we compare this chart to Barrick Gold’s chart, we see a striking difference:
While gold was range-bound for four years before March, Barrick Gold’s stock has had a slow and steady decline during the same period. It did bounce back from $18 to $26 in the first half of 2022, but that bounce back was short-lived and the stock crashed again. Since then, it has tried to bounce back multiple times but has always fallen short of reaching the previous swing high.
The only silver lining all this while has been that the stock has multiple times taken support near $13.8 levels and never traded below it for an extended period. Most recently, it bounced back from that level in February this year and reached a high near $19.
Considering the weakness that Barrick Gold’s stock continues to show on the long-term charts, investors are advised not to buy the stock at current levels. There are better-performing gold miners that one can consider. Investors who are holding the stock can continue to hold it as long as it trades above $13.8, but must consider selling it if it breaks below that level.
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