Last week’s production report from Newcrest showed a drop of 5.2% versus the previous quarter. However, the company reaffirmed their full-year production forecast of between 2.4 and 2.65 million ounces of Gold for the year.
Despite the lower quarterly production, and sideways trade in Spot Gold, shares of NCM have gained about 4% from $21.50 to $22.30 over the last six trading sessions.
One of the reasons for this is last week’s 2% slide in the AUD/USD.
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NCM sells its Gold on the international market which is priced in US Dollars. As the AUD/USD trades lower, the profit margin on a fixed ounce of Gold increases.
The technical picture has also improved on the stock and we see price resistance near the mid-September level at $23.20. A rally back over $1300 in Spot Gold would likely extend the price range to $23.70.
Newcrest Mining
AUD/ USD
