Let’s have a look at the one of the Top 10 Gold Miners in the World (Number 3 in North America): Kinross Gold Corporation (KGC) from a Technical POV (point of view).
The overall analysis after today’s market action is Bearish overall, in the near term it is Bearish, mid-term Neutral, and long term Very Bearish, this can change on any continuing strong upside action with good volume.
Today’s Action (November 13th, 2008)
KGC 11.41 -2.00 Volume13,697,493
There is a Gap Open Up on October 29, 2008 at (8.59 to 8.94); the near term resistance is 12.48, the 50 day moving average at 13.19, support 8.77 and next 6.85.
This is Kinross Gold Corporation: Kinross Gold likes Gold mining so much since prices have risen sharply that it has acquired three North American Gold miners Echo Bay Mines, Crown Resources, and Bema Gold. Those transactions made Kinross one of the world’s Top 10 Gold miners, raising its proved and probable reserves of 45MM ozs of Gold and another 75MM ozs of Silver. Nearly half of the company’s revenues come from its Fort Knox and Round Mountain properties in the USA. Kinross also has operations are located in Brazil, Chile, Russia, and Zimbabwe. Kinross bought Bema for about $3B b at the beginning of 2007 a deal that came on a wave of consolidation in the Gold mining industry.
Gold Demand: Strong domestic and international demand
Large economies of scale: Large
Kinross Gold Competitors
Barrick Gold, Toronto, Canada
Goldcorp, Vancouver, Canada
Newmont Mining, Denver, CO
Note: In the metals mining sector demand is driven by industrial demand and economic growth, both domestic and foreign. A company’s profitability depends on volume and efficient operations. Large companies like Kinross can afford to discover and develop new deposits and increase reserves. Small companies typically own just one mine, limit exploration to that one property, and operate it as efficiently as possible. Gold mining today is highly automated; annual revenue per employee is approx. US$300,000. The overall analysis after yesterday’s market action is Bearish overall, in the near term it is Neutral, mid-term Bearish and long term Bearish, this can change on any strong upside action with good volume.
Gold and Politics
On August 15, 1971, US President, Richard Nixon unilaterally canceled the Bretton Woods system and stopped the direct convertibility of the United States dollar to gold. As a result, the U.S. dollar was decoupled from gold, and gold prices could fluctuate like any other commodity.
The data is limited when comparing the performance of Gold prices as they relate to the political affiliation of the President of the United States. There are some striking similarities between the performance of Gold prices during the great Gold bull market of the 1970s and today’s Gold bull market and how the Presidential political affiliation was and is tilted.
Popularity: 2% [?]
