Why Is Barrick Stock Down When Gold Prices Up?

Core Viewpoint - Barrick Gold's stock has underperformed despite rising gold prices, primarily due to operational challenges and increased costs [1][2]. Group 1: Stock Performance - Barrick Gold stock has fallen approximately 21% over the last two months, trading around $17 per share, while the S&P 500 is up about 3% [1]. - Over the past three years, Barrick's annual returns were -13% in 2021, -6% in 2022, and 8% in 2023, showing less volatility compared to the S&P 500 [3]. Group 2: Gold Prices and Market Conditions - Gold prices have surged from around $2,050 per ounce in early January to about $2,650 currently, marking one of the highest annual rises in a decade [1]. - Factors driving gold prices include moderating U.S. inflation, market volatility, and geopolitical risks [1]. Group 3: Operational Challenges - Barrick faced significant operational challenges, including production setbacks at the Pueblo Viejo mine and lower ore grades from some mines [1]. - In Q3 2024, Barrick sold 967,000 ounces of gold, a 6% decline from 1,027,000 ounces in the same quarter last year [1]. Group 4: Cost Structure - Barrick's all-in sustaining costs rose 20% year-over-year to $1,507 per ounce in Q3, influenced by lower production and inflationary pressures [2]. - The increase in costs may be driving investors towards more cost-efficient mining companies [2]. Group 5: Future Outlook - Barrick's performance is expected to improve in Q4 and the coming year due to the ramp-up of the Pueblo Viejo plant and increased throughput at Nevada Gold Mines [3]. - The company has recorded a 44% year-over-year increase in net earnings per share in the first nine months of 2024, driven by higher gold prices [3]. - Barrick's expansion into the copper business could provide additional upside, given copper's relevance in electric vehicles and renewable energy [3].